Comfort food isn't healthy, expensive, or suffering in this weak casual-dining climate.
The actual results do need a little clarification. The 4% gain in net sales is self-explanatory. However, the 24% spurt in earnings per share is deceptive on two counts. First, the company has swallowed a ton of shares outstanding over the past year. Net income actually rose by just 5%. However, even the 5% gain is overstated, as Bob Evans recorded a larger asset sale gain than it did a year earlier. Back that out, and the actual net income gain would be cut roughly in half.
Comps don't lie, though. In that sense, Bob Evans is also off to another good start in fiscal 2009 after a healthy May. The same can't be said for Mimi, which is a problem because the smaller casual dining chain has received the lion's share of the company's expansion attention.
Is comfort food the secret to attracting budgeting diners? Not entirely. Comps at Steak n Shake
Cracker Barrel parent CBRL Group
Breakfast specialists like Denny's
This doesn't mean that the niche will coast through the balance of the year. Rising food costs and patron resistance to absorb those gains will challenge margins. Higher fuel prices will also eat into the disposable income that would go into eating out.
Investors in any of these companies will probably want to keep an eye on DineEquity. The moment that IHOP's 21-quarter streak comes to an end will be the moment comfort food leads to indigestion.
More from The Motley Fool
Why Sprint, Chicago Bridge & Iron, and Bob Evans Farms Jumped Today
These stocks led the market higher on a quiet day. Find out why.
What Happened in the Stock Market Today
On a positive day for the overall market, Vera Bradley and Bob Evans Farms shares went in drastically different directions.
Why Bob Evans Farms, Logitech International, and Western Digital Jumped Today
These stocks climbed on a record-breaking day for the stock market. Find out why.