Columbus, Ohio - Bob Evans Farms, Inc. announced financial results for the second quarter and first half of fiscal 1998. Earnings per share were up more than 20 percent for both periods, which reflect stronger same-store sales in the company's restaurants and improved profitability in its food products segment.
For the 13 weeks ended Oct. 24, 1997, net sales were $224.7 million, up 9 percent from $206.2 million a year ago. Net income advanced 21 percent to $11.7 million, or $0.28 per share, from $9.7 million, or $0.23 per share, in the corresponding period last year. For the first half of the fiscal year, net sales increased 7 percent to $446.7 million, while net income rose 19 percent to $22.1 million, or $0.53 per share.
The restaurant segment achieved its fourth consecutive quarterly increase in same-store sales, which were up 4.8 percent from a year ago. Total restaurant sales rose nearly 10 percent, and the segment's operating income gained 12 percent despite higher labor and related costs.
"Same-store sales have benefited from our continued focus on executing at the restaurant level -- serving high-quality food quickly and satisfying our customers at every level," said Daniel E. Evans, chairman of the board and chief executive officer. "We are particularly pleased with the consumer response to our fall menu, introduced midway through the second quarter, which included several new items that have proven popular."
In the food products segment, a decline in raw material costs contributed to a significant profit gain relative to subpar results a year ago. The segment's net sales for the second quarter rose 7 percent from the corresponding period last year, due to slightly higher wholesale sausage prices and a 3 percent volume increase for comparable products. Operating profits recovered to $2.8 million from $0.3 million, primarily because the company's hog costs averaged $46.00 per hundredweight, compared with $53.00 a year ago. Evans noted, "Since hog prices trended lower throughout the quarter, we are looking forward to continued favorable cost comparisons in our sausage business during the second half of the year."
Evans concluded, "While we are pleased that both of our principal businesses are generating stronger results, we know there is still plenty of room for improvement. Maintaining the current upward trend in same-store sales remains the cornerstone of our efforts to build profitability in the restaurant segment. Longer term, we will concentrate on generating faster growth and improved returns for our stockholders. To accomplish this, we are planning to increase our restaurant expansion pace and focusing on our strong market presence on the food products side through additional new product development."
On Oct. 31, 1997, the board of directors declared a quarterly cash dividend of eight cents ($0.08) per share on the company's outstanding common stock. The dividend is payable Dec. 1, 1997, to stockholders of record at the close of business on Nov. 14, 1997.
Bob Evans Farms, Inc. owns and operates 402 full-service, family restaurants in 19 states, principally in the midwestern, mid-Atlantic and southeastern United States, as well as Texas. The company also is a leading producer of pork sausage under the Bob Evans and Owens brand names. Other operations include Mrs. Giles Country Kitchens, a producer of fresh deli salads and Hickory Specialties, which manufactures charcoal and smoke- flavoring products.
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