Meat+Poultry - March 2017 - 10

BUSINESS NOTES

CHIPOTLE STRUGGLES IN 2016
At the conclusion of 2015, former
co-CEO of Chipotle Mexican Grill
Monty Moran said 2016 would be
a "very difficult year." That was an
understatement. The E. coli outbreak
linked to Chipotle restaurants in 2015
continued to heavily impact the chain's
bottom line throughout 2016. The

Revenue for the full year
2016 was $3.9 billion,
down 13.3 percent from
the prior year.

MEAT+ POULTRY | 03.17 | www.meatpoultry.com

Bob Evans Farms Inc. is now a pure
play food company. On Jan. 24, the
company announced the sale of its
Bob Evans Restaurants business unit
to the private equity company Golden
Gate Capital for $565 million plus the
assumption of certain liabilities. Net
proceeds from the sale to Bob Evans
Farms are expected to be between $475
million to $485 million.
On the same day, Bob Evans Farms
entered into an agreement to acquire
the Pineland Farms Potato Co. (PFPC),
Mars Hill, Maine, for $115 million.
Pineland Farms is a value-added
potato processor serving the retail and
foodservice markets. The company also
operates a cheese processing business.
"We believe this transaction will
better enable BEF Foods to continue
growing and innovating," said Saed
Mohseni, president and CEO of Bob
Evans Farms.

With the sale to Golden Gate
Capital, Mohseni will be leaving
Bob Evans Farms to lead Bob Evans
Restaurants. Mike Townsley, president
of the BEF Foods business unit, will
assume the role of president and CEO
of Bob Evans Farms.

TYSON REPORTS STRONG
Q1 PERFORMANCE
Tyson Foods Inc. raised its earnings
forecast for the year after strong
performances in the company's

Bob Evans

10

BOB EVANS FARMS SPINS
OFF RESTAURANTS

Beef and Pork segments lifted the
company's earnings by 29 percent in
the first quarter of 2017.
Net income attributable to Tyson
for the quarter ended Dec. 31, 2016,
totaled $593 million, or $1.59 per share,
compared with $461 million, or $1.15
per share reported for the first quarter
ended Jan. 2, 2016.
Sales for the quarter totaled $9,182
million, compared with $9,152 million
reported in the year-ago period.
"The year is off to the best start in
company history with record earnings,
record operating income and record
cash flows," Tom Hayes, president
and CEO, said in a statement. "Return
on sales for each
operating segment
was in or above the
normalized range.
The tremendous
returns generated
in the Beef and
Pork segments are
providing fuel for
growth in our valueadded Chicken and
Tom Hayes
Prepared Foods
segments.
"Tyson Foods again led retail food
manufacturers in both sales volume
and sales dollars for the 13-week
period corresponding with our fiscal
first quarter," he added. "Not only did
we lead in sales volume, according
to IRI, we were the only company to
show volume growth among the top 10
branded food companies."
Tyson's results were helped by
strong performances in the company's
Beef and Pork segments, which
benefited from higher domestic and
export demand, according to Tyson.
"Due to our outstanding
performance in Beef and Pork and
strong market conditions in the first
quarter, we are raising our annual
earnings guidance to $4.90-$5.05 per
share," Hayes said. "Our path won't
be linear, but our team is focused
on delivering long-term growth and
creating shareholder value."

Tyson

chain's net income for the year ended
Dec. 31, 2016, fell 95 percent from
$475.5 million to $22.9 million. And, net
income for the fourth quarter fell 76
percent from $67.9 million in 2015 to $16
million for the fourth quarter of 2016.
Revenue for the full year 2016 was
$3.9 billion, down 13.3 percent from
the prior year. The company reported
the decrease in revenue was driven by
a 20.4 percent decrease in comparable
restaurant sales, partially offset by
revenue from new restaurants.
Chipotle opened 240 new restaurants
during 2016, with three restaurant
relocations or closures, bringing the
total number of restaurants to 2,250.
Seventy-two of the new restaurants
were opened in the fourth quarter.
The company credited the new
Q4 restaurant openings with its
increase in revenue for the quarter,
up 3.7 percent to $1.0 billion from
Q4 2015. The increase was slightly
offset by a 4.8 percent decrease
in comparable restaurant sales.
Comparable restaurant sales decreased
20.2 percent in October, 1.4 percent in
November, and increased 14.7 percent
in December 2016.
Despite the challenging year and
less than stellar financial results,
Chipotle executives remain optimistic
about the year ahead.
"We are energized and focused to
achieve our goals in 2017, and to return
to a path of long-term value creation

for our shareholders," said Steve Ells,
founder, chairman and CEO of Chipotle.
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Meat+Poultry - March 2017

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