Bob Evans hikes 2018 guidance after Q1 sales jump
- Bob Evans Farms net sales for the first quarter of its 2018 fiscal year were $109.3 million, compared to $85.9 million for the same period last year, according to its most recent earnings report. This 27.1% jump was partially driven by $8.6 million in sales from the recently acquired Pineland Farms Potato, plus $5.2 million of sales to Bob Evans Restaurants, which were sold earlier this year.
- Net income on a GAAP basis was up 54% to $7 million, or 35 cents per diluted share. It was $4.6 million and 23 cents, respectively, from the same period last year.
- The Ohio company cited "significant volume growth" in sausage — despite production cost increases — and in refrigerated side dishes from Pineland Farms. As a result, the company's fiscal year 2018 guidance now projects fiscal 2018 net sales at $474 million to $486 million and raises its earnings-per-share forecast to between $2.10 and $2.30.
This is the second earnings report the company has released since selling its restaurants to Golden Gate Capital in late April for $565 million.
Bob Evans has been focusing on side dishes, sausages and other packaged foods since shedding the restaurants. It also bought Pineland Farms Potato — and its popular ready-to-eat mashed potato products — for $115 million earlier this year as a profit and growth strategy acquisition.
President and CEO Mike Townsley said in the earnings report that he was very pleased with the strong start to the company's fiscal year. “We continued to grow household penetration of refrigerated sides and increased market share by 250 basis points from the year ago period. With the additional capacity and product capabilities provided through the acquisition of Pineland Farms on May 1, 2017, we are well positioned to continue driving robust growth of our refrigerated sides portfolio."
Even without its famous restaurants, the company has considerable value as a standalone business — estimates have gone as high as $1.4 billion — and may be in the sights of other companies looking for an easy acquisition target.
Meanwhile, shares of Bob Evans Farms have been moving around. Morgan Stanley cut its shares by 75.8% during the first quarter, while several other investors have increased their ownership positions. Nearly 78% of the company's stock is now owned by hedge funds and other institutional investors.
Bob Evans Farms is a leading producer and distributor of refrigerated potato, pasta and vegetable-based side dishes, pork sausage, and a variety of refrigerated and frozen convenience food items under the Bob Evans and Owens brand names.