Bob Evans Farms Inc. reported that same-store sales rose 1.6 percent at its Bob Evans Restaurants during its third quarter, marking the company’s third consecutive period of same-store sales increases.
The earnings report was the company’s first since selling its 145-unit Mimi’s Café concept to Le Duff America Inc. for $50 million on Feb. 15.
During the quarter, same-store sales fell 4 percent at Mimi’s Café locations, said Paul DeSantis, chief financial officer at Bob Evans. That dip in same-store sales highlights why the brand was sold, he said.
“Our company is committed to realizing the full potential of the Bob Evans brand,” said Bob Evans Farms chief executive Steve Davis. “Our efforts and investments are now focused on our two Bob Evans branded segments…both businesses delivered positive sales growth this quarter,” he added, referring to Bob Evans Restaurants and retail subsidiary BEF Foods.
During the quarter ended Jan. 25, Bob Evans reported net income of $5.5 million, or $0.20 per share, compared with $20.3 million, or $0.69 per share the year prior. Excluding some items, including costs associated with the sale of Mimi’s, adjusted net income for the quarter was $15.8 million, or $0.56 per share.
Revenue for the quarter was $434.4 million, a slight increase from $428.3 million during the third quarter of 2012.
Part of the reason why sales weren’t higher during the quarter was inclement weather in the Midwest, a core market for Bob Evans Restaurants, DeSantis said. Snow events, including one that occurred the weekend after Christmas — an important weekend for the brand — impacted business, he said.
However, menu innovations helped propel the Bob Evans brand through the third quarter, he added.
“Our current $9.99 three-course dinner menu features proven winners,” he said. “However, we also continue to innovate within the platform.” The company added more lower-calorie options after the New Year and added more fish options during Lent, he said.
Moving past the refresh
Bob Evans is in the middle of an ongoing restaurant redesign strategy, the “Farm Fresh Refresh” project, which Davis said is already boosting sales. Same-store sales at redesigned locations completed more than a year ago rose 2.7 percent during the quarter, the company reported.
The company expects the redesigns to be complete during fiscal year 2014, one year earlier than originally planned, Davis said. As a result, the company plans to open 10-15 new restaurants in 2015.
“Our approach to new markets will be to establish a concentration of units,” he noted. “You will not see us opening one-offs in non-contiguous states.”
The company will also focus on expanding its bakery, carryout and catering platforms in coming quarters, Davis said. The bakery business, he noted, has a lot of potential and is a key element of the store redesigns. In addition, the fact that Bob Evans expands across all dayparts is a competitive advantage in catering.
The company will also increase its marketing spending during the fourth quarter, some of which will focus on the company’s digital assets, including driving sales conversions on Bob Evans’ website and interacting with consumers via social media.
At the end of the third quarter, Columbus, Ohio-based Bob Evans owned and operated 565 restaurants in 19 states.
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