Jamba Juice Company, a subsidiary of
), is planning a massive expansion in its home-court California,
over the next six-to-seven years. The company's growth plans
include the launch of up to 120 stores in more than 100 business
areas and 25 mall locations across Northern, Central and Southern
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Jamba Juice currently operates more than 788 stores. The company
plans to open the new stores through both new and existing
franchises. It is also preparing for the launch of many
The company's founding state, California, remains an ideal
location for development as it is one of the most populous and
widespread state in the U.S. The promising restaurant industry in
this state is a major driving force to the U.S. economy. In 2012,
the total revenue from the restaurant sector in California is
projected around $63.8 billion.
We believe that the development plan will further strengthen
Jamba Juice's position in its prime California market, going
forward. However, the company will likely face stiff competition
in that area from its peers like
Caribou Coffee Company Inc.
Jamba has always remained focused on expansion and expects
accelerated growth in both core existing markets as well as new
geographic areas. For 2012, Jamba plans to open 40-50 new stores
in the U.S. locations and 15 new stores internationally. In 2013,
the company plans to further speed up its development process by
opening 60 to 80 U.S. and international stores.
Jamba, currently carries a Zacks #3 Rank, which translates into a
short-term 'Hold' rating. Our long-term recommendation for the
stock remains 'Underperform'.