Bob Evans Farms, Inc. BOBE reported second-quarter fiscal 2018 earnings per share (EPS) of 35 cents, in line with the Zacks Consensus Estimate. The figure increased 16.7% from the prior-year quarter earnings of 30 cents on higher revenues.
Net sales of $117.6 million were up 22.3% year over year. The uptick was partially driven by $9.5 million of sales from the company's recently acquired Pineland business and $6 million of sales to Bob Evans Restaurants (BER), which was eliminated in the prior year. Also, the top line came slightly above the Zacks Consensus Estimate of $117.1 million.
While pounds sold in the fiscal second quarter increased 48.2% year over year (11.4% growth excluding Pineland and BER), average net selling price per pound declined 17.4% from prior-year quarter. This downturn in average net selling price is reflective of an increased mix of food service sales due to the company’s recent transactions as well as an increase in trade spending.
Adjusted operating income decreased 13.2% year over year to $9.9 million in the reported quarter. The decline was due to lower gross profit margin along with higher operating expenses and increased amortization expenses. Also, adjusted operating income margin contracted 340 basis points (bps) to 8.4% of net sales.
Meanwhile, adjusted EBITDA (earnings before interest, tax, depreciation and amortization) in the quarter fell 1.9% year over year to $17.7 million. Adjusted EBITDA margin decreased 370 bps to 15% (of net sales).
On Sep 19, 2017, the company entered into a definitive merger agreement to be acquired by Post Holdings. The transaction is anticipated to be completed in the first calendar quarter of 2018. Notably, in light of the pending transaction, the company did not update its earlier issued financial guidance for fiscal 2018.
Bob Evans has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Bob Evans Farms, Inc. Price, Consensus and EPS Surprise
Bob Evans Farms, Inc. Price, Consensus and EPS Surprise | Bob Evans Farms, Inc. Quote
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