Columbus, Ohio-based restaurant chain Bob Evans Farms has announced fiscal results that exceeded guidance for the fiscal Q4 and year ended 26 April 2002.
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Diluted earnings per share for the Q4 were US$0.49, up 44% from a year ago, reflecting significantly improved profitability in both the restaurant and food products businesses. For the full year, excluding non-recurring items, earnings per share on a diluted basis were US$1.84, a 28% increase from the previous year.
Total Q4 net sales were US$260.5m, up 5% year on year. Net income was US$17.5m, or US$0.49 per share on a diluted basis, compared with US$11.9m, or US$0.34 per share in the Q4 last year. For the full year, net sales were US$1.06bn, up 5% from US$1.01bn in fiscal 2001. Excluding the impact of two non-recurring items during the Q2, net income for fiscal 2002 was US$65.3m, or US$1.84 per share, compared with US$50.8m, or US$1.44 per share last year. Including the non- recurring items, net income for fiscal 2002 was US$67.7m, or US$1.91 per share.
Same-store sales in the restaurant segment were up 3.3% for the Q4, in part reflecting a 2.7% average menu price increase. Including new restaurants, the segment’s total sales rose 8% for the Q4, while operating income jumped 39%. The Q4 restaurant operating margin expanded to 10.3% from 8% a year ago, reflecting continued reductions in labour costs, as well as lower food costs and selling, general and administrative expenses. For all of fiscal 2002, same-store sales increased 3.2% and the segment’s total sales rose 8%, while operating income excluding non-recurring items advanced 26%.
Bob Evans also announced same-store sales for the fiscal 2003 month of May (four weeks ended 24 May). Same-store sales in “core” restaurants increased 3.2% from the comparable period a year ago. Menu prices for the month were up 2.6%.
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By GlobalDataThe company opened 27 new outlets during fiscal 2002, bringing the total at year-end to 495. Current plans for fiscal 2003 call for about 30 new restaurants. The company is to continue its ongoing investments in remodelling and rebuilding existing restaurants.
“We are very pleased with the company’s record financial performance in fiscal 2002, and in particular with the continued sales momentum and significantly improved profitability in our restaurant business,” said Stewart K. Owens, chairman and CEO: “We have now completed our fifth consecutive year of same-store sales increases, which we believe reflects the continuing successful evolution of our restaurant business. We also made progress in profitability during FY 2002 through a significant reduction in labour costs.”
In the food products segment, profitability benefited primarily from lower raw material costs. Total food products sales were down 6% in the Q4, but were off less than 1% after adjusting for the divestiture of Hickory Specialties. The segment’s operating income for the Q4 was up 37% from a year ago, reflecting lower hog costs and selling, general and administrative expenses. For the full year, the segment’s sales were down 5% (2% after adjusting for the divesture of Hickory Specialties), while operating income excluding non-recurring items increased 5%.
Owens commented: “While always difficult to forecast, conditions in the hog market are currently expected to remain favourable for at least the early months of our new fiscal year.
“Overall, in view of the possibility of more normal winter weather, which would affect our restaurant sales, and perhaps, an eventual rise in hog costs, we expect our earnings growth rate to moderate in FY 2003 – especially in the H2,” Owens continued: “We have raised our expectations. We are now comfortable with estimates of about US$2 per share for the FY, and about US$0.55 for the Q1.”
At the end of 2002, the company’s balance sheet remained strong. Stockholders’ equity was US$521.4m, compared with US$64.1m in total debt.
