EMERYVILLE Calif. Jamba Inc. on Thursday posted wider losses for its first quarter as its smoothie chain continued to struggle with falling sales.
Also on Thursday, Jamba said it had launched a refranchising plan that is expected to result in the sale of up to 150 company-owned Jamba Juice locations, mostly outside the brand’s core market of California.
For the quarter ended April 21, Jamba reported a net loss of $10.2 million, or 19 cents a share, compared with a loss of $6.4 million, or 12 cents per share, in the year ago quarter. Revenue for the quarter fell 12.5 percent, to $88.9 million.
Same-store sales at company-owned units were down 13.8 percent, Jamba said.
James White, Jamba's president and chief executive, said the refranchising plan would allow the company to pay down debt and help finance future growth.
The goal is to sell units along with development agreements to expand the chain’s presence outside California. Officials said company research indicates the potential for as many as 2,700 stores in the United States. Jamba currently owns 499 stores and franchises 233 others.
“Refranchising will also allow us to better focus our operational resources to company-owned stores in California to improve efficiencies and performance,” White said.
The Emeryville, Calif.-based chain said it has engaged the Praetorian Group to spearhead the refranchising program, which the company hopes will be completed within 12 to 18 months.
Earlier this year, White outlined strategic priorities that included cutting about $25 million in store-level costs, expanding food options on the menu and more aggressively franchising in non-traditional locations, as well as building licensing opportunities.
Last week, Jamba announced plans to lend the Jamba Juice name to a line of frozen novelties and a toy blender for kids to make smoothies at home. The company is also working with Nestle on a line of ready-to-drink beverages.
“With a continued disciplined effort on expense reduction, a commitment to a customer-first ‘operationally focused’ service culture across all Jamba Juice stores, building a retail food capability across all dayparts, and enhancing our consumer products licensing platform, our revitalization is well under way,” White said.
Still, because of the challenging economic environment, White said the company expects to see negative same-store sales trends continue. Jamba said it would open few, if any, company stores this year, though up to 50 franchise stores are expected to open.
Contact Lisa Jennings at [email protected].