Bob Evans Farms
reported a drop in fourth-quarter earnings, citing sales weakness, and the company warned of more pain in the current period.
The chain of family restaurants said Monday that it earned $5.5 million, or 16 cents a share, compared with $19.3 million, or 54 cents a share, in the same quarter last year. The results matched Wall Street's expectations, according to consensus estimates reported by Thomson First Call.
"Sales and profitability at Bob Evans Restaurants clearly remain under pressure," the company said, citing sales dynamics in the Midwest. "Our older, core customer has not been eating with us as frequently, and sales have not responded as much as we expected to our customer satisfaction and value initiatives. These programs also have increased our food and labor costs."
The company said it would curtail issuing profit guidance, although it warned first-quarter earnings will be "down significantly."
The stock fell $1.47, or 6.2%, to $22.36 in after-hours trading.
For the fourth quarter, the company's total sales reached $382.6 million, a 22% increase from last year's $313.9 million, but the jump was attributed to the company's acquisition of Mimi's Cafe restaurants in July 2004. Same-store sales at Bob Evans Farms restaurants fell 3.4% from a year ago, even with average menu prices down 0.6%.
Expectations for the company were lowered last month, when it trimmed its earnings outlook for the quarter to 16 cents a share. Wall Street analysts had previously been expecting earnings of 22 cents a share.