Chute Gerdeman

Executives at Bob Evans Farms Inc. told investors that a push for carryout sales at the company’s namesake chain and streamlined operations at Mimi's Café are expected to reverse falling sales at both brands by the end of the year.

The call with investors Wednesday came after the Columbus, Ohio-based company cited slow sales and heavy impairment charges for a drop in second-quarter profit. 

For the quarter ended Oct. 29, Bob Evans recorded net income of $7.8 million, or 26 cents per share, compared with year-earlier income of $15.5 million, or 50 cents per share. Revenue slipped 1.8 percent to $417 million, from $424.8 million in the second quarter of 2009. Blended same-store sales declined of 2.2 percent, comprising a 0.9-percent decrease at Bob Evans and a 5.6-percent fall at Mimi’s Cafe. 

Chief financial officer Tod Spornhauer said the falloff in retail sales of packaged foods within Bob Evans’ restaurants accounted for most of the same-store sales decrease at the namesake chain. 

Bob Evans to expand carryout options
Now that most Bob Evans units have phased out an in-store retail component that dragged down sales, the chain will shift its focus to growing carryout sales, chief executive Steve Davis said during the call with investors.

“Carryout is a growth opportunity for us,” Davis said. “What was off strategy was all the retail in the stores. It was a crutch and prevented us from getting after carryout sales. Our guests were screaming for this, and we weren’t providing it in a way they wanted it.”

In five Ohio stores equipped with a “Taste of the Farm” grab-and-go area to push carryout, off-premise sales are outpacing the rest of the system, Davis and Spornhauer said. Those units also recorded a rise in dine-in sales, they added.

Carryout sales now represent 11 percent of sales at Bob Evans, which Davis said brought Bob Evans in line with casual-dining averages with more room to grow. That push will be tagged in Bob Evans’ commercials for other sales-driving initiatives this quarter, like holiday gift cards and the recently launched Big Farm Burger platters.

“What we’re focused on is sequential comparable-sales improvement, and some of our initiatives have helped us turn the corner,” Davis said. “The burgers did well in test, carryout is starting to add a benefit, as will our gift card promotions and the Family Feast [holiday offering]. We have a nice arsenal of offerings, and we’ll see where we are at the end of the third quarter.”

Bob Evans plans to build three new namesake restaurants and remodel another 30 to 35 units in the current fiscal 2011 to include the Taste of the Farm concept, Davis said.

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