Bob Evans Farms Inc. (Columbus, Ohio) announced a 23 percent increase in total net sales for the fiscal first quarter ended July 29, 2005. The convenience food retailer said the increase was primarily attributable to the Mimi’s Cafe acquisition in July 2004. Net income dropped roughly in half for the quarter, a decline reflecting lower same-store sales and operating margins at Bob Evans Restaurants, partially offset by improved results in the food products segment.
Same-store sales for the quarter decreased 1.9 percent at Bob Evans Restaurants. Average menu prices were down 0.1 percent from a year ago. At Mimi’s Cafe, same-store sales increased 3 percent, with average menu prices up 2.3 percent.
Larry Corbin, interim ceo and president, said, “Bob Evans’ same-store sales remained soft in the first quarter, putting added pressure on our expense ratios as we continued to incur increased costs related to customer satisfaction initiatives. We have seen some improvement in sales and profitability recently; in our July fiscal month, Bob Evans’ same-store sales declined less than 1 percent, and margins were higher than they had been earlier in the quarter. However, we have a great deal of work still ahead of us to restore profitability to acceptable levels.”
During the first quarter, the company opened six new Bob Evans Restaurants, bringing the total to 593. As previously announced, the company is reducing the number of Bob Evans Restaurant openings to approximately 20 this year, from 37 in fiscal 2005, as it focuses on improving results at existing units. One Mimi’s Cafe restaurant was opened in the quarter, and 14 new Mimi’s are expected to open in fiscal 2006, compared with 11 in fiscal 2005.
The company also announced the resignation of chairman and ceo Stewart Owens, “for personal reasons,” effective immediately. Robert Rabold has been appointed chairman of the board, and Corbin will be interim ceo and president. Rabold is retired chairman of Motorists Mutual Insurance Co. in Columbus. Corbin retired in July 2004 from Bob Evans Farms as executive vp of restaurant operations after 42 years with the company.