Roth Capital upgraded Charlotte Russe (NASDAQ: CHIC) to Hold from Sell. The firm is positive on management's strategy to drive improved operating performance and is encouraged by the company's longer-term growth prospects.
Banc of America upgraded shares of Las Vegas Sands (NYSE: LVS) to Neutral from Sell following the company's capital raise as they see a more balanced risk/reward at current levels. The firm lowered their target to $5 from $12.
Credit Suisse upgraded Ameriprise (NYSE: AMP) to Outperform from Neutral.
Bob Evans (NASDAQ: BOBE) was upgraded to Hold from Underweight at KeyBanc.
J. Sainsbury (OTC: JSAIY) was upgraded to Buy from Hold at ING and to Neutral from Underweight at JP Morgan after the company topped earnings expectations.
Analyst downgrades:
JP Morgan downgraded General Motors (NYSE: GM) to Neutral from Overweight citing the "ambiguity of government aid structure" and the likely dilution to equity. The analyst said GM needs money now to get past December 2008 and will need at least $15B to get through 2009, with the total bailout potentially reaching $30B.
Goldman downgraded Dell (NASDAQ: DELL) to Sell from Neutral and added shares to the Conviction Sell List.
J.C. Penney (NYSE: JCP) was lowered to Equal Weight from Overweight at Morgan Stanley.
Bob Evans Farms (NASDAQ: BOBE) owns and operates full-service restaurants, under the Bob Evans and Mimi's Cafe brand names. The Bob Evans chain consists of 571 stores in the Midwest, mid-Atlantic and Southeast regions of the United States. Mimi's Cafe runs 132 restaurants, primarily in California and other western states. The company is also a leading producer of pork sausage and complementary homestyle convenience foods, under the Bob Evans and Owens brand names. Smithfield Foods (NYSE: SFD) is a competitor.
The firm pleased investors last week, when it reported solid Q4 results and issued in-line guidance for its FY09 performance. The CEO attributed success to cost management on the restaurant side and better-than-expected numbers from the food products business. The shares were subsequently upgraded from "neutral" to "buy" at MKM Partners.
Restaurant operator Bob Evans Farms Inc. (NASDAQ: BOBE) and apparel designer and retailer Guess Inc. (NYSE: GES) both reported earnings growth on Tuesday that beat analysts' expectations.
Bob Evans said its fiscal fourth-quarter profit rose 5% from the year-ago period to $16.1 million, or 52 cents per share. Revenue rose 4% to $436.4 million. Analysts polled by Thomson Financial had estimated earnings of 41 cents per share on sales of $441.5 million.
The company said results were boosted by increases in both its restaurant and food products segments. Same-store sales at Bob Evans brand restaurants rose 1.7%. And the quarter included a pretax gain of $700,000 from the sale of real estate assets.
For the year, Bob Evans reported income of $64.9 million, or $1.95 per share, compared with $60.5 million, or $1.66 per share, in the prior year. Revenue rose 5% to $1.74 billion.
Shares rose 85 cents, or 3%, to close at $29.09. Shares are up 8.3% year to date.
Here's a peek at what analysts surveyed by Thomson Financial are expecting from companies scheduled to report quarterly results in the first week of June, 2008.
The following companies are expected to post earnings growth, compared to the same period in the previous year:
Take-Two Interactive (NASDAQ: TTWO) up 136.6% (from a loss) to $1.12 per share, on $499.1 million in revenue
There is an outfit headquartered in Columbus, Ohio that got its start as a twelve-stool diner owned by a local farmer. He said he could not get any decent sausage for the diner and began making his own back at the farm. That was fifty-nine years ago. Both the diner and the sausage-making businesses have since prospered.
Bob Evans Farms (NASDAQ: BOBE) owns and operates full-service restaurants, under the Bob Evans and Mimi's Cafe brand names. The Bob Evans chain consists of 579 stores in the Midwest, mid-Atlantic and Southeast regions of the United States. Mimi's Cafe runs 118 restaurants, primarily in California and other western states. The company is also a leading producer of pork sausage and complementary home-style convenience foods, under the Bob Evans and Owens brand names. Smithfield Foods (NYSE: SFD) is a competitor.
The firm had good news for investors last Monday evening, when it announced Q2 EPS of 45 cents and revenues of $426.3 million. Analysts had been expecting 39 cents and $425.5 million. Management also guided FY08 EPS to $1.77-$1.84 ($1.72 consensus). The stock popped through 30-day and 50-day moving average resistance on the news and began consolidating the gain in a bullish "flag" pattern. Then, on Thursday evening, the board authorized a two million share addition to its stock buyback program. That boosted the current fiscal year authorization to five million shares and took the stock price to the top of the flag. Further upside is expected.
Casual restaurant and pork products producer Bob Evans Farms, Inc. (NASDAQ: BOBE) beat Wall Street estimates of $0.39 per share and posted another profitable quarter, despite rising labor and food commodities costs. This is the fifth consecutive quarter of same store sales increases, though admittedly some of those increases have been small. CEO Steve Davis is justifiably proud of the cost control measures and productivity programs he has instituted across the board. The company has cut payroll and advertising expenses deeply.
Net income for 2Q 2008 was $15.5 million or diluted EPS of $0.45, up 21.6% from a year ago and beating Wall Street estimates by 6 cents. Net sales in the restaurant segment rose 2.9% to $356 million. But the growth driver for Bob Evans right now is its much smaller food products segment that produces pork products for sale in grocery stores. Thus segment posted net sales increase of 5.5% to $71 million, and a 79% operating income increase.
Bob Evans has repurchased two million shares thus far in FY 2008, with plans for an additional one million share buyback. FY 2008 guidance remains as previously forecast -- diluted EPS in the $1.77-$1.84 range. Patient investors are finally getting to share in the pork.
Bob Evans Farms, Inc. (NASDAQ: BOBE), the bountiful breakfast chain with 579 outlets in the east, as well as 115 Mimi's Cafés in the west, announced a first quarter 2008 net income of $13.3 million, or $0.38 per share, on sales of $424 million. These results represent a 5.5% increase over 2006. The strongest performer was its name-brand outlets, with traffic up 3.2%, while Mimi's Cafés dropped 0.7%.
A dividend of $0.14 per share will be paid out in this quarter. The company also repurchased over one million shares, and carries a board authorization for an additional two million in 2008.
In light of these results, the company reaffirmed its guidance for the 2008 fiscal year, projecting $4-5 million in asset sales which will pork up its projected earnings to $1.77-$1.84 EPS.
Looking at net income over the past three years, we see a steady but very modest growth of around 2% per year. The company also has a modest expansion program, planning to open only four new Bob Evans restaurants in 2008, after only ten in 2007, while adding 14-16 units to its Mimi's Café brand. The company's Bob Evans units don't serve alcohol, which constrains their profitability, while the Mimi's Cafés do, perhaps accounting for the uneven investment.
The other side of The Bob Evans Farms business, accounting for about 18% of revenue, is in food products. Bob Evans is best known for its sausage products, a product impacted by the sharp rise in corn prices.
Given the gradual but upward trend of the company's bottom line, and the company's cautious approach to growth, analysts give the stock a hold recommendation -- a stock unlikely to delight, or disappoint. In other words, a meat and potatoes stock to match their menu.
On June 4, pork-centered restaurant and food products company Bob Evans Frams, Inc. (NASDAQ: BOBE) reported decent sales numbers for fourth quarter 2007 but worrisome income numbers. The company continues to fiddle with its menu, trying to cater to more health conscious consumers for whom pork links, biscuits, grits and gravy may not appeal. Too bad. Upscale, trendy and healthy Bob Evans is not. Sustained tinkering with menu offerings will only alienate its core customer base. Bob Evans is caught amongst a value conscious customer base, rising commodity costs particularly pork, and relatively static menu offerings. The small quarterly dividend of $0.14, is not enough to make this restaurant stock attractive to investors when there are so many other options available.
Net sales for 4Q hit $418.4 million, up 5%. Net income, however, was down 25% to $15.3 million, or EPS $0.42. For FY 2007, net sales were up 4% to $1.7 billion. EPS would have increased 26% but did not due to stock options and performance-incentive expenses. I wonder what those costly incentives were and how management was compensated for a same-stores sales increase of 1% for 4Q coupled with a 22% decline in 4Q operating income. FY same-store sales were 0.1%, which management is calling a positive, but let's call it what it is -- sales were flat. The increase in revenue came almost fully from menu price increases.
Senior management continues to adjust not only menu offerings, but also restaurant locations. During FY 2007, Bob Evans closed 18 Bob Evans Resaturants, opened 10 new ones as well as 13 new Mimi's Cafes, and plans to open 14-16 new restaurants in FY 2008. This will bring the combined total restaurant count to over 700. The fastest growing unit of the company is its food products segment consiting mainly of Bob Evans brand frozen pork products. Rather than continue to open restaurants, perhaps part of Bob Evans' turn around should be to the frozen foods aisles in the grocery store. This unit posted an operating income of 12%. The stock closed yesterday at $38.35, up $0.05.
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Analyst upgrades:
million. Analysts had been expecting 39 cents and $425.5 million. Management also guided FY08 EPS to $1.77-$1.84 ($1.72 consensus). The stock popped through 30-day and 50-day moving average resistance on the news and began consolidating the gain in a bullish "flag" pattern. Then, on Thursday evening, the board authorized a two million share addition to its stock buyback program. That boosted the current fiscal year authorization to five million shares and took the stock price to the top of the flag. Further upside is expected.
Casual restaurant and pork products producer 
Bob Evans Farms, Inc.
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