Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of restaurant operator Bob Evans Farms
So what: In a lot of ways, Bob Evans' quarterly results really didn't look all that great. The company, which operates Bob Evans Restaurants and Mimi's Cafes, saw revenue decrease 1.8% from the same period last year, driven by a 5.6% decline in Mimi's same-store sales and a 2.2% slide across both concepts. The $417 million in total revenue also fell short of analysts' expectations. In addition, significant costs during the quarter -- most notably $10 million in asset impairment charges -- dragged down operating profit by 44% from a year ago. However, excluding extraordinary charges, the company's profit was ahead of what Wall Street was hoping for.
Now what: Better-than-expected earnings are generally a crowd pleaser and raised guidance rarely fails to get investors giddy. For the company's fiscal 2011, management pegged revenue guidance at $1.7 billion, which is just ahead of what analysts were estimating, and upped the midpoint of its operating earnings estimate to a bit more than 2% higher than its previous estimate. Particularly after today's gains, shares don't appear to be overly cheap, but as a relatively stable company with good cash flow and a decent dividend, it may be one for investors to keep their eyes on.
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