Jamba Juice: Healthful focus boosts 2Q sales

The parent of Jamba Juice reported Wednesday a 17-percent increase in second-quarter profit, saying the promotion of more healthful smoothie and menu options has boosted sales.

For the quarter ended July 3, Emeryville, Calif.-based Jamba Inc. reported net income of $4.6 million, or 5 cents per share, compared with $3.9 million, or 5 cents per share, in the same quarter a year ago.

Second-quarter revenue rose 12 percent to $66 million, which included an additional week compared with last year.

Systemwide same-store sales increased 5.7 percent, which included a 5.1-percent increase among company-owned locations and a 6.4-percent increase among franchised units. The Jamba Juice chain totals 783 locations.

Jamba said this second quarter was the seventh consecutive quarter of same-store sales increases for the chain, which is in the second phase of a turnaround effort that began about three years ago. The turaround plan has included the addition of new food offerings — from steel-cut oatmeal to frozen yogurt — as well as cutting costs, refranchising efforts, and building a consumer packaged goods platform of Jamba Juice-branded products in grocery and other retail stores.

This year, Jamba has focused on turning the smoothie concept into a healthy, active lifestyle brand. The chain, for example, has introduced a reduced-calorie Make It Light option for classic smoothies; introduced new All Fruit and Fruit and Veggie smoothies; expanded the Fruit Refresher line made with coconut water; and added more fresh blended juices.

Encouraged by the positive results, Jamba in May raised its outlook for the year, saying same-store sales will increase between 4 percent and 6 percent. Earlier estimates had full-year same-store sales rising between 3 percent and 4 percent.

“Jamba experienced another strong quarter with gains in comparable store sales, store traffic, average price and adjusted operating margin,” James White, Jamba chair, president and chief executive, said. “We are accelerating our growth as a healthy, active lifestyle brand through product and menu innovation, retail growth in the U.S. and internationally, and expansion of our consumer products platform.”

Earlier this year, Jamba also began growing a small self-serve format called JambaGO, designed for K-12 schools and other non-traditional locations.

Last month at the School Nutrition Association conference, the chain debuted a new smoothie developed in partnership with the National Dairy Council that includes fruit and fat-free milk for JambaGO locations. The smoothie meets new federal requirements for school nutrition and will be available in schools in September in two flavors: berry and peach.

In a call with analysts, White said the company ended the second quarter with about 130 JambaGO locations. He predicted that between 400 and 500 units will open before the end of the fiscal year, reaching 1,500 locations by the end of 2013.

For the quarter, the company generated about $300,000 in revenue from CPG products, and White said Jamba is on track to reach its goal of $3 million for the year.

During the quarter, Jamba completed the acquisition of the intellectual property rights to a line of energy drinks developed with Nestle, which White said will be re-launched to further grow the CPG business.

Also under development are new premium Talbott Tea beverages, he said. The company acquired the premium tea brand earlier this year.

Meanwhile, traditional Jamba Juice locations are also growing.

During the quarter, seven domestic franchise units opened, including four non-traditional locations, as well as six international units. Four Jamba locations closed during the quarter.

White said 30 international locations have opened in the past 18 months with 20 outlets in South Korea, seven in Canada and three in the Philippines.

For the year, the company expects that a total of 40 to 50 locations will open in the U.S. and another 15 locations internationally.

Contact Lisa Jennings at lisa.jennings@penton.com.
Follow her on Twitter: @livetodineout