Columbus, OH - Bob Evans Farms, Inc. announced financial results for the third quarter and nine months of fiscal 1998. Substantial increases in earnings per share for both periods were primarily attributable to increased pounds sold and lower raw material costs in the company's food products business and strong same- store sales in its restaurant segment.
For the 13 weeks ended Jan. 23, 1998, net sales were $219.6 million, up 10% from $199.2 million a year ago. Net income for the quarter was $11.1 million, or $0.27 per share, up 43% from $7.8 million, or $0.19 per share, the previous year. For the nine-month period, net sales rose 8% to $666.3 million, and net income advanced 26% to $33.2 million, or $0.80 per share.
Same-store sales in the restaurant segment increased 6% for the quarter. Overall, restaurant sales for the quarter were up 11% from a year ago, and the segment's operating income rose 16%. For the nine months, restaurant sales and operating income increased 8 and 16%, respectively.
"We are pleased to report our fifth consecutive quarter of same-store sales growth," said Daniel E. Evans, chairman of the board and chief executive officer. "While moderate winter weather in most of our markets probably magnified the underlying sales trend, we believe our continued focus on excellent customer service at the store level is making a significant contribution, and helping to set Bob Evans Restaurants apart from our competitors."
The company's food products business benefited from hog costs averaging $37.00 per hundredweight for the quarter, compared with $54.00 a year ago. Wholesale sausage prices were essentially flat, although promotional activity increased. Overall, the food products segment's net sales for the quarter were up 8%, which reflect a 5% volume increase for comparable products and a growing contribution from newer products. The segment's operating income nearly tripled, to $6.1 million from $2.1 million a year earlier. Evans noted, "In the third quarter, as in the second, hog prices trended lower throughout the period, and we are optimistic that cost comparisons will remain favorable in the months ahead."
Evans concluded, "While our top priority is sustaining our strong momentum and improving profitability on both sides of our business, we are focusing increased attention on longer-term strategies to accelerate growth and enhance returns for our stockholders. In the restaurant segment, preparations are continuing for a faster expansion pace in fiscal 1999 and beyond. On the food products side, we intend to continue leveraging our unique brand name and quality reputation through new product development."
On Jan. 30, 1998, 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 March 2, 1998, to stockholders of record at the close of business on Feb. 13, 1998.
Bob Evans Farms, Inc. owns and operates 404 full-service, family restaurants in 20 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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