Jamba Juice sales squeezed in Q2Jamba Juice sales squeezed in Q2

Lisa Jennings

EMERYVILLE Calif. Jamba Inc., parent to the 735-unit Jamba Juice chain, reported this week that sales trends continued to suffer during its latest quarter, especially in its home state of California, leading to double-digit declines in revenue and same-store sales.

The company was able to post a smaller net loss because of cost-cutting measures and a favorable comparison to year-ago results.

For the quarter ended July 14, Jamba reported a net loss of $5.1 million, or 10 cents per share, compared with a net loss of $89.2 million, or $1.69 per share, in the same quarter a year ago, when the company booked about $53 million in impairment charges.

Revenue for the latest quarter fell 15.1 percent to $83.2 million. Same-store sales for corporate locations fell 13.7 percent.

Key to the revitalization plan for Jamba Juice is the addition of a line of grab-and-go wraps and salads, as well as baked flatbreads and fruit tea infusion drinks, which were introduced in June in 200 California locations.

“We are pleased with the initial response to the grab-and-go food offerings,” said James White, Jamba chief executive. “Based on our preliminary analysis, our stores in California, which were the first to offer the grab-and-go food items, are showing an increase in customer visits and average check.”

The new items have helped mitigate what White described as an “intensely difficult macro environment” in California, where growing unemployment and tremendous amounts of lost consumer wealth, resulting from housing busts or the stock market decline, have become a common challenge for struggling restaurant companies here. Numerous California-based chains, including Real Mex, El Pollo Loco, Carl’s Jr. and BJ’s Restaurants, have recorded slowed sales trends.

Jamba continues it grab-and-go rollout outside of California with free samples of the new menu items in Chicago. About 300 locations now offer the menu items, Jamba said. Locations in New York have begun offering the flatbreads as well.

More menu items are coming later this year, the company said, as well as a test of hot beverages.

“We continued to make strong progress against our strategic initiatives in the second quarter, despite a challenging operating environment,” White said. “As we move into [the third quarter], I am confident that we have the right strategy to turn around and transform Jamba, the right capabilities, resources and team to execute them with excellence, but much of our success, of course, will be contingent upon the condition of the economy.”

White has been the architect of a turnaround effort over the past year for Jamba that has included a revamped menu, elimination of about $25 million in store-level costs, refranchising and licensing branded retail products.

Earlier this year, the company sold $35 million in convertible preferred stock, including more than $15 million from the family that owns the Ontario, Canada-based Yogen Fruz frozen yogurt and smoothie franchise brand. Another $19.55 million investment was from New York-based private-equity firm Mistral Equity Partners.

Earlier this week the company announced an agreement with The Inventure Group for a Jamba-branded home smoothie kit. Jamba has also expanded brand licensing with an agreement to develop a toy smoothie maker and novelty ice cream products under the Jamba Juice brand. The company is also developing a line of ready-to-drink beverages with Nestle.

Contact Lisa Jennings at [email protected].