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Jamba Juice outlines sales drivers

Jamba Juice parent company Jamba Inc. said this week that turnaround efforts have given the smoothie chain traction in the first quarter, and officials pledged to deliver positive sales for the full year.

New traffic drivers include a move into the coffee arena, as well as permanent value menu offerings.

Jamba chairman, president and chief executive, James White, said during the company’s first-quarter conference call this week that the smoothie chain is currently testing coffee in 47 stores in San Diego and Sacramento. The coffee drinks include lattes and brewed coffee, he said.

“Our stores are fully capable of doing coffee from an operational standpoint, and we anticipate a broader roll out in the fall,” he said.

In addition, the chain has launched a new value menu promotion aimed at driving traffic, trial and awareness. Each of the five weekdays will feature value menu items, such as the $2 oatmeal special on Wednesdays.

Jamba Juice also plans to continue licensing efforts, which White said have the potential to add a significant incremental revenue stream. The chain has introduced Jamba-branded frozen novelty bars, and make-at-home smoothie kits, for example.

For the quarter ended April 20, Emeryville, Calif.-based Jamba reported a net loss of $5.3 million, or 13 cents per share, compared with a loss of $10.2 million, or 19 cents per share, for the same quarter a year ago.

The narrowed loss was driven by a $2.8 million year-to-year decrease in impairment of long-lived assets, as well as a $2.1 million gain on the sale of 20 corporate stores during the quarter, the company said.

First-quarter revenue fell 9.5 percent to $80.4 million, partly because of the reduction in the number of corporate locations. Same-store sales fell 3.3 percent for the quarter, compared with a decline of 13.8 percent in the first quarter of 2009.

Over the past year, turnaround efforts have included an expansion of the food menu, a new hot beverage platform, the pursuit of new licensing opportunities and disciplined cost cutting, along with the refranchising plan.

During the first quarter, seven franchised locations and one new corporate store opened, bringing the store count to 745, of which 458 are company-owned.

For the year, the company said up to 50 franchised locations are expected to open and the Jamba Juice brand will expand into one “major international market,” which the company did not identify.

The company also said it would sell an additional 37 corporate stores as part of its ongoing refranchising effort. Jamba said the program seeks to sell 150 corporate locations by year end, and it already has achieved 60 percent of that.

Contact Lisa Jennings at [email protected].

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