Bob Evans Farms, Inc. (BOBE)

“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.