) is set to report second-quarter fiscal 2014 results on Aug 4.
Last quarter, the owner and franchiser of Jamba Juice stores
delivered a massive negative surprise of 200%.
In-fact, the company has delivered negative earnings surprises
in three of the last four quarters with an average miss of 51.0%.
Let us see how things are shaping up for this announcement.
Factors to be Considered This Quarter
Jamba Juice is currently in the phase of transitioning from
existing company-owned store model to franchise-based model. As a
result, the company has been experiencing flat revenues as the
benefit from the growing franchise model is being offset by loss of
direct revenues due to closure of company-owned stores. This is
expected to continue in the second quarter as well.
However, the company is taking several initiatives to boost the
top line. In the first quarter, the company introduced a revamped
menu featuring whole food blending, high-end juice options and a
host of new ingredients (e.g. kale, beets and cucumber). The new
menu is expected to boost traffic in the to-be-reported quarter as
traffic is at its peak in Jamba stores in the summer months.
Moreover, growing health consciousness among Americans and
increasing demand for whole fruit smoothies should boost sales.
Jamba's exit from an underperforming business at Manhattan is
expected to ease the pressure on margins this quarter.
Our proven model does not conclusively show that Jamba Juice is
likely to beat earnings this quarter. A stock needs to have both a
and a Zacks Rank #1, 2 or 3 to surpass earnings estimate. However,
that is not the case here due to the following factors:
ESP for Jamba is 0.00%.
Jamba has a Zacks Rank #3 (Hold) which when combined with a 0.00%
ESP makes surprise prediction difficult.
We caution against stocks with Zacks Rank #4 and 5 (Sell-rated
stocks) going into the earnings announcement, especially when the
company is seeing negative estimate revisions momentum.
Stocks to Consider
Here are some other restaurant companies that, according to our
model, have the right combination of elements to post an earnings
beat this quarter:
Zoe's Kitchen, Inc. (
), with an Earnings ESP of +50.0% and a Zacks Rank #2.
Jack in the Box Inc. (
), with an Earnings ESP of +3.51% and a Zacks Rank #3.
Texas Roadhouse, Inc. (
), with an Earnings ESP of +3.03% and a Zacks Rank #3.
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