Bob Evans Farms Q1 Profit Down - Update

(RTTNews) - Restaurant chain Bob Evans Farms Inc. (BOBE), Monday reported a lower profit for the first quarter, hurt mainly by asset impairment charges and a revenue decline. Nonetheless, earnings beat analysts' estimates by a penny, but revenue fell short of expectations.

Columbus, Ohio-based Bob Evans' first-quarter profit dropped to $9.2 million or $0.33 per share from $15.0 million or $0.53 per share last year.

Excluding one-time items, earnings for the quarter were flat at $0.58 per share. On average, five analysts polled by Thomson Reuters expected earnings of $0.57 per share for the quarter. Analysts' estimates typically exclude special items.

Bob Evans said sales for the quarter dropped to $329.4 million from $409.7 million last year. Nonetheless, excluding Mimi's Cafe business, revenues grew 1.9 percent. Analysts' estimated revenues of $333.49 million for the quarter.

The company completed the sale its Mimi's Cafe restaurant chain to to LeDuff America Inc. in February.

Gross margin for the quarter dropped to 68.3 percent from 70.5 percent last year, attributed to commodity cost pressures, particularly for pork-related items, including sows and bacon.

Same-store sales at Bob Evans Restaurants dropped by a 0.6 percent,

BEF Foods sales increased 12.5 percent, with volume up 13 percent reflecting continued strong refrigerated side dish and food service growth driven by the Kettle Creations acquisition.

Going forward, the company reaffirmed its fiscal year 2014 adjusted earnings guidance of $2.60 to $2.67 per share. Analysts currently expect earnings of $2.65 per share for fiscal year 2014.

The company boosted its dividend by 12.7 percent to $0.31 per share and also increased its buy back program by $150 million.

The company also announced it is partnering with AVI Food Systems Inc. to develop and license "Bob Evans Express," a new concept to be located in nontraditional venues such as hospitals, universities, airports, malls, corporate cafeterias and manufacturing plants.

BOBE closed Monday at $47.57, down $0.17 or 0.36%, on the Nasdaq.