Mixed 4Q at Jamba - Analyst Blog


Jamba Inc. ( JMBA ) reported a loss of 9 cents per share in the fourth quarter of 2012; a penny better than the Zacks Consensus Estimate and also ahead the year-ago quarter's loss of 15 cents per share. The company's growing operational efficiency was primarily responsible for the bottom line improvement during the quarter. In the full year of 2012, loss was 3 cents per share versus 16 cents in the prior year.

Total revenues in the quarter remained almost flat year over year at $44.2 million but were below the Zacks Consensus Estimate of $46 million. Although Jamba's quarterly revenues were positively impacted by higher franchise revenues and new unit openings, it was more than offset by the lower Company-owned store sales. In 2012, total revenues increased 1% year over year to $228.8 million.

Quarter Highlights

Sales at the company stores were down 1.9% year over year to $40.8 million in the fourth quarter. Franchise and other revenues were $2.8 million, up 24.5% annually, fueled by an increase in the number of franchise stores and higher comparable store sales (comps).

Jamba, the leading restaurant retailer of food and beverage offerings, experienced negative comps of 1.2% in the reported quarter versus a rise of 7.7% in the year-ago quarter. The decline in company-owned comps was caused by lower traffic. Same-restaurant sales at franchise stores grew 2.3% versus growth of 4.0% in the year-ago quarter.

Jamba's adjusted operating profit margin expanded 50 basis points (bps) to 12.7% in the quarter, influenced by enhanced labor productivity.

Store Update

In 2012, 59 stores were opened, among which one was Company-operated and the rest franchised. A total of 19 stores were closed, of which 6 were company owned. Only one store was refranchised. This brought the total number of stores to 774, of which 473 were franchised and 301 Company-owned.

In 2013, Jamba plans to set up 60-80 new stores in international locations.

Financial Position

The company exited the fourth quarter with cash and cash equivalents of $31.5 million versus $31.9 million in the previous quarter. Total liability was $60.2 million compared with $60.8 million in the third quarter.


Emeryville, Calif-based Jamba expects Company-owned comparable store sales growth of 4% -6% and restaurant operating margin of 20%.

Our Take

Jamba is turning around at a slow but steady pace. It is continuously gaining from its BLEND Plan 2.0 initiatives in terms of cost and efficiency and now expects that its newly-launched BLEND Plan 3.0 would further augment its growth in fiscal 2013. Jamba also intends to focus on the innovation of new brands, advertising programs and product extensions. However, lower traffic may negatively impact Jamba's business going forward.

Jamba currently retains a Zacks Rank #3 (Hold). Another restaurateur Red Robin Gourmet Burgers Inc. 's ( RRGB ) adjusted earnings in the fourth quarter of 2012 were way ahead of the Zacks Consensus Estimate as well as the year-ago quarter's earnings. Red Robin Gourmet currently carries a Zacks Rank #1 (Strong Buy).

Other restaurant companies like Krispy Kreme Doughnuts, Inc. ( KKD ) and Burger King Worldwide, Inc ( BKW ) both with a Zacks Rank #2 (Buy) are expected to perform well, going ahead.

BURGER KING WWD (BKW): Free Stock Analysis Report

JAMBA INC (JMBA): Free Stock Analysis Report

KRISPY KREME (KKD): Free Stock Analysis Report

RED ROBIN GOURM (RRGB): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: BKW , JMBA , KKD , RRGB



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