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Jamba Inc. reveals 2013 growth initiatives

Company builds momentum after third-quarter traffic and same-store sales boosts

Jamba Inc. will begin a makeover of all corporate Jamba Juice units next year, among other initiatives, to build on momentum that helped it boost third-quarter traffic and same-store sales.

Though net income was flat for its Oct. 2-ended third quarter, Emeryville, Calif.-based Jamba Inc. exited the period with “excellent momentum,” said James D. White, the company's chairman, chief executive and president, late last week during a call with analysts.

As a result, he said, the company was reaffirming its full-year guidance of company-store same-store sales growth of from 4 to 6 percent and the opening across the Jamba Juice system of 40 to 50 U.S. locations, up to 15 international stores, and 400 to 500 JambaGO automated drink stations for non-traditional sites, such as schools. In addition, the company still plans to open three juice-centric concept stores in 2012 “and we’ll be tracking those units closely to assess their potential” as a future growth vehicle, White said.

“We will deliver our first year of profitability as a public company [in six years] in ‘12 and you will see us continue to accelerate on that in ’13,” he added.

White also noted that in 2013 Jamba Inc. will launch a four-year capital expenditure program for refreshing and redesigning all company-owned units. He also said that the company in 2013 expects to increase the quickly growing JambaGO network by 1,000 locations, to 1,500 in all.

The company’s 788-unit Jamba Juice chain will also partner with Lionsgate to promote its film, "The Twilight Saga — Breaking Dawn Part 2." White said the deal with Lionsgate will see Jamba Juice host advance screenings of Breaking Dawn Part 2, stage social media contests with a trip to the Los Angeles premiere of the film as one of the prizes, and offer film-related premiums.

Outside its retail store operations, the company expects to deliver nearly $3 million in consumer-packaged goods income in 2012 and see double-digit growth in that business in the year ahead, White said.

“We are entering a new phase in which we will create new ways to build on our heritage and accelerate our growth as a leading global, healthy-active-lifestyle brand,” White told analysts.

Traffic, same-store sales rise in 3Q

The company said net income was flat, at $4.1 million, for the 13-week, 2012 third quarter, compared with a 12-week third quarter in 2011. Because of a change in the weighted average shares used in the computation of earnings per share, that metric was 4 cents a share in the latest period, versus 5 cents a share a year earlier.

The difference in number of weeks per quarter for the two quarters compared resulted from Jamba Inc.’s move this year to a new reporting format.

Revenue for the third quarter rose 14.7 percent to $65.5 million compared with $57.1 million in the 12-week period a year earlier, the company said.

“Accelerated investments” in the third quarter in value-oriented promotions, JambaGO and the juice-bar concept in development, among other “growth initiatives,” pressured earnings even as the company continued to reduce labor as a percentage of sales and take costs out of its supply chain, Jamba Inc. officials indicated.

Traffic and same-store sales at company-owned locations rose by 5.1 percent and 3.9 percent, respectively. In comparison, company-store traffic had fallen 2.1 percent and same-store sales growth was 3.3 percent in 2011’s third quarter.

Franchised Jamba Juice locations saw third-quarter same-store sales rise by 1 percent after having climbed by 4.2 percent a year earlier.

White attributed the higher traffic at company-owned Jamba Juice units to multiple developments, such as new analytical tools that helped the company better leverage promotions, including buy-one-get-one offers and dollar deals. The franchise community, which experienced about a quarter of the growth achieved at company locations, will begin benefitting from those analytic tools in 2013, he said.

Also key to traffic growth, White indicated, were new products and the broader deployment of the “Make It Light” line of smoothies with one-third less calories, sugar and carbohydrates compared with their “classic” counterparts.

“Our marketing encourages trial by new customers, who become long-term fans, by showcasing our healthy on-the-go options along with our value proposition,” he said in a written statement.

Excluding JambaGO sites, the Jamba Juice chain ended the third quarter with 788 total units — 301 company and 454 franchised locations in the United States and 33 licensed sites overseas, rising from 762 a year earlier.

Contact Alan J. Liddle at [email protected].
Follow him on Twitter: @AJ_NRN

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