Bob Evans Farms Inc. said Tuesday its profit rose 37 percent in the second quarter as lower interest payments and a better tax rate offset weaker than expected sales.
The operator of Bob Evans and Mimi's Cafe restaurants earned $15.5 million, or 50 cents per share, in the quarter that ended Oct. 23. That is up from $11.3 million, or 37 cents per share, a year earlier.
The company, based in Columbus, Ohio, said its food business had a more profitable quarter which countered declines in its restaurant unit, while results were also helped by lower interest and taxes. Net interest expenses totaled $2.5 million in the quarter versus $3.4 million a year ago, due to a reduction of outstanding debt.
Revenue fell 2 percent to $424.8 million from $435.5 million.
Analysts polled by Thomson Reuters had expected 48 cents per share in profit on slightly higher sales of $428.6 million.
Sales at stores open at least a year fell 3.8 percent in the second quarter, dropping 6.8 percent at Mimi's Cafe and 2.8 percent at Bob Evans locations. Sales at stores open at least a year are a key measure of retailer performance because they measure growth at existing stores rather than from newly opened ones.
The company reaffirmed its estimate for fiscal 2010 operating income of $110 million to $115 million. The outlook includes the impact of a 53rd week, which the company estimates will contribute $31 million in net sales and $5 million in operating income.
The company expects to build no new Bob Evans Restaurants and two Mimi's Cafes in fiscal 2010.
Bob Evans shares closed earlier at $27.81, up 13 cents.