Bob Evans Farms Sales Up Income Down22 August 2013
US - US meat processor and restaurant chain Bob Evans Farms saw consolidated net sales up by 1.9 per cent to $329.4 million in the first quarter of the 2014 financial year, compared to net sales of $323.4 million in the corresponding period last year, excluding Mimi’s Cafe.
The increase in consolidated net sales was due to the 12.5 per cent sales growth at BEF Foods, partially offset by a 1.4 per cent net sales decline at Bob Evans Restaurants.
Consolidated operating income was $22.7 million, or 6.9 per cent of net sales, in the first quarter of 2014, compared to operating income of $27.4 million, or 6.7 per cent of net sales, in the corresponding period last year.
Bob Evans Restaurants’ non-GAAP operating income declined $2.9 million. BEF Foods’ non-GAAP operating income declined $2.6 million.
Driving the decrease at Bob Evans Restaurants was a $1.8 million unfavourable cost of sales rate variance driven primarily by higher bacon and other pork-related costs; $1.4 million of incremental depreciation expense; $1.1 million of incremental Farm Fresh Refresh costs, including closed restaurant days, and preopening expenses; $0.7 million of incremental SG&A expense; and sales deleverage, partially offset by a $2.3 million reduction of other operating expenses, primarily from a reduction of advertising, which was more than offset by increased discounts.
BEF Foods was negatively impacted by $2.1 million of incremental sow costs; $1.7 million of incremental trade rate variance that reflects a greater weighting of trade spending in the first quarter relative to the second quarter of fiscal 2014 compared to the same periods in fiscal 2013; and $1.1 million of incremental SG&A expense, partially offset by sales leverage.
Chairman and Chief Executive Officer Steve Davis said: "During the first quarter, we demonstrated our commitment to investing in our businesses for growth while simultaneously returning capital to shareholders.
“Our transformational growth investments, including the Farm Fresh Refresh program and the BEF Foods’ plant expansions, remain on-time and on-budget, providing us with the confidence to reiterate our full year non-GAAP earnings per share guidance of $2.60 to $2.67 for fiscal 2014, despite significant commodity cost pressures, particularly pork-related items, including sows and bacon.
“First-quarter net sales growth of 1.9 per cent, excluding Mimi’s Café, reflects ongoing strong growth at BEF Foods, driven by double-digit gains of side dish and food service sales, partially offset by a 0.6 per cent decline in same-store sales at Bob Evans Restaurants.
“The decline in same-store sales was due primarily to the impact of incremental closed restaurant days associated with the acceleration of the Farm Fresh Refresh remodel programme.”
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