COLUMBUS, Ohio – Bob Evans Restaurants reported consolidated non-GAAP operating income of $24 million for the second quarter of fiscal 2013 compared to $23.4 million for the same period in 2012.
Consolidated net sales were $410.9 million for the quarter, an increase of 0.9 percent compared to $407.2 million in the second quarter of fiscal 2012. The company attributed the gain to an increase in the BEF Foods segment in addition to new restaurant and same-store sales increases at Bob Evans Restaurants.
Steve Davis, chairman and chief executive officer, said the second-quarter results reflect the positive impact of recent investments in growth and productivity initiatives designed to position the company for continued sustainable revenue and profit growth in fiscal 2013 and beyond.
"Bob Evans Restaurants has generated positive same-store sales for three of the last four quarters based upon our guests' favorable reactions to both the Farm Fresh Refresh remodeling program and our launch of value-oriented sales layers available at every day part," Davis said. "All of our sales layers – dine-in, carryout, bakery and catering – are contributing to both the revenue and margin lift we are generating through the Farm Fresh Refresh remodels.
"In response to consistently high returns on investment, positive guest feedback, and operating results, we are accelerating the rollout of the Farm Fresh Refresh program," he added. "We now expect to have the entire chain remodeled by the end of fiscal 2014, one year ahead of our original plan."
The company plans to accelerate its Farm Fresh Refresh remodeling program with 56 percent of the restaurant chain to be remodeled by the end of fiscal 2013 and all 565 restaurants to be remodeled by the end of fiscal 2014.
A key component of the company's growth strategy includes aggressive growth in the company's side dish business and bringing manufacturing capability in-house.
"BEF Foods is also performing well with positive volume gains in three of the last four quarters," Davis said. "Our high-growth refrigerated side dish business, up more than 12 percent during the second quarter, and food service business, up more than 44 percent during the second quarter, continue to drive revenue growth and enhance the margin structure of the business.
"The acquisition of the Kettle Creations brand and manufacturing facility at the beginning of the second quarter raises the level of vertical integration within BEF Foods to 82 percent, and enables us to continue growing and innovating economically with side dish products to serve our retail and food service customers," he said.
The company reaffirmed its earnings per share guidance of $2.67 to $2.73, and raised its long-term EPS guidance. The company’s board of directors approved a dividend of 27.5 cents per share.
"The sustainability and long-term growth potential of the transformations we have achieved in our core Bob Evans Restaurants and BEF Foods segments provide us with the confidence to raise our long-term annual non-GAAP EPS growth guidance to 8 to 12 percent, from the previous guidance range of 7 to 10 percent," Davis said. "Furthermore, the strategic fit and long-term growth potential of Mimi's Cafe relative to our other businesses prompted us to initiate a process to evaluate our strategic alternatives for that segment, including but not limited to a potential sale. We have been working with our independent financial advisor, Lazard, to assist us in that process."
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