Bob Evans Farms, Inc. (NASDAQ:BOBE)

CAPS Rating: 3 out of 5

A full-service restaurant company that operates two distinct restaurant concepts, Bob Evans Restaurants and Mimi's Cafes. It is also a producer and distributor of pork sausage and complementary, homestyle, convenience food items.

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Player Avatar NetscribeRstrnts (97.27) Submitted: 11/22/2006 11:30:17 AM : Outperform Start Price: $28.30 BOBE Score: +13.18

“Think of delicious food--Think of Bob Evans ”. Incorporated in 1953, it is a full service restaurant company and a leading producer of pork sausage and homestyle, convenience food items. Currently operating in around 694 locations with 589 Bob Evans Restaurants and 105 Mimi's Café Restaurants in 18 states. The Company operates through two segments of business: Restaurants, which contribute around 85% of the company’s revenue and the Retail food products, contribute the rest.

With disposable income on rise customers are spending a greater portion of their food dollar outside. Additionally the National Restaurants Organization has predicted that the restaurant industry would see 5.1% increase on y-o-y basis to $ 511.1 billion in 2006. To take the advantage of these facts the company is focusing more on its restaurant business and planning to expand its reach by opening more restaurants and adding more items on its menu. The Company expects the sales of its food product segment to grow by 8 to 9% but the margin is expected to decline to 6 to 7% because the hog cost is expected to average around 42 to $43 per hundred weight in the second half of the year.
The Company is strategically focusing to improve performance through five brand builders which are: to win together as a team, consistently drive sales growth, improve margin with an eye on customer satisfaction, be the best at operations execution and increase returns on invested capital. The result of this strategic approach was shown in the performance of the Q2 fiscal 2007, with the sales increasing by 5% and reaching $412.7 million, net income growing by 2.6% and the same store sales also steadily increasing quarter to quarter.

Member Avatar NetscribeRstrnts (97.27) Submitted: 4/16/2007 7:57:52 AM
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Bob Evan's Farms, Inc. achieved five consecutive months of higher same-store sales at its Bob Evans restaurants for the first time in three years. These restaurants feature a wide variety of homestyle menu offerings designed to appeal to its diverse customer base, primarily families. The company’s Mimi’s Café restaurants also showed a solid performance and are expected to be one of the company’s strongest growth drivers as it maintains the solid pace of new store openings. These restaurants feature a wide selection of high-quality food in an upbeat and sophisticated atmosphere reminiscent of New Orleans cafés and European bistros. These two together represent approximately 83% of the company's revenues The company also operates a Food Products division which represents approximately 17% of revenues. This segment saw a 20th consecutive period of increased comparable pounds sold and a significant improvement in the profitability, which was up by 30% than a year ago. Although the overall same store sales dipped in the month of February, it rebounded back in March showing a 1.2% increase. The decline in the guest traffic since the past couple of months has been a cause of concern for the concept. Never-the-less this decline is not expected to last longer as a solid pipeline of new product, including two new pastas, the Knife & Fork Sandwiches and the Stacked and Stuffed Hotcakes that debuted in January are expected to boost the guest count in the coming months.The company is adapting a strategy of growing through successful product introductions and additional points of distribution for its food products segment. Additionally at Mimi’s it is eying to expand its alcoholic beverage selection to a full bar, rather than just beer and wine, to capitalize on the higher margins provided by specialty drinks. Moreover with the rising dual income households and demand for convenient food outside home in the US provides a great platform form for Bob Evan's Farms to continue its growth track in the coming future.

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