Jamba narrows losses in 1Q

Jamba Inc. narrowed its losses during the first quarter, and an analyst predicted the company would reach solid profitability later this year.

“Our solid first-quarter results, which came in the face of very strong year-ago performance, demonstrate Jamba’s ongoing momentum with increased traffic, average check and operating margin improvement,” said Jamba Inc. chair, president and chief executive James White.

For the quarter ended April 2, the Emeryville, Calif.-based operator of the Jamba Juice smoothie chain recorded a net loss of $1.2 million, or negative 2 cents per share, compared with a $1.5 million loss, or negative 3 cents per share, a year ago.

Revenue rose nearly 4 percent to $55.1 million, compared with $53 million in last year’s first quarter.

Same-store sales for company-owned locations increased 3.6 percent for the quarter, lapping a 12.7-percent increase a year ago. More transactions and increases in average check drove the gain, the company said.

Systemwide same-store sales increased 1.3 percent, which was offset by a 0.9-percent decline in same-store sales at franchise locations.

“[Jamba] has shown consistently strong same-store sales increases over the past two years, and its transition to a mainly franchise model is bolstering cash flow," Roth Capital Partners analyst Anton Brenner wrote in a report Wednesday. "Although the company is profitable only in two quarters, it should reach solid profitability this year.”

Brenner noted that Jamba Juice’s value promotions, which emphasize bundled meals, helped drive sales during the quarter, but they also contributed to a higher cost of sales. Restaurant margins declined about 0.8 percent to 14.6 percent of revenues.

During the quarter, the chain promoted a new kids’ meal and JambaGO smoothie options, as well as a $1 weekday happy hour and a new Tropical Harvest fruit-and-vegetable smoothie for $2 as a limited-time offer.

White added that franchise development is strong. Jamba Inc. struck a master franchise agreement during the quarter in Mexico that will add 80 locations over the next decade, as well as a multi-unit domestic agreement to build 15 outlets in Missouri and Kansas, and 125 locations in California.

Jamba ended the quarter with 779 U.S. units, 479 of which were franchise-operated. During the quarter, eight new franchise locations — all in nontraditional locations — opened domestically, and six international units opened, including five in Canada and one in the Philippines.

Three California units offered the new Fresh Squeezed Juice platform at the end of the quarter. Before the end of the year, the company said 100 locations will include the fresh juice bars.

The company added 144 new locations of its self-service JambaGO variant, bringing the total to 548 units. Before year’s end, Jamba expects open 1,000 JambaGO locations.

In its outlook for the year, Jamba said it expects to see same-store sales rise between 4 percent and 6 percent, and revenue from consumer packaged goods of between $4 million and $5 million.

Contact Lisa Jennings at [email protected].
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