Jamba Juice 2nd-Q comps fall; franchise growth slowed

Nation's Restaurant News,  August 27, 2007  

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EMERYVILLE, CALIF. -- Jamba Inc., parent to the Jamba Juice smoothie and snack brand, disclosed this month a 14.1-percent increase in second-quarter revenue to $89.6 million despite a 3.3-percent drop in systemwide same-stores sales, which it blamed on soft traffic in the chain's core market of California.

For the three months ended July 24, Jamba Juice's systemwide traffic fell 8 percent, said one securities analyst that follows the company. The second-quarter same-store sales result was expected to be negative, but only down about 1 percent, because of the difficult comparison from year-earlier results that were up 5.9 percent.

Jamba Juice said it experienced "softness in California traffic," where about 65 percent of its system is located. Yet, "emerging markets are posting strong comparable-sales growth and solid traffic increases," said Paul Clayton, Jamba's president and chief executive.

The company opened 27 branches during the second quarter in markets including Oregon, Florida and Las Vegas to reach a total of 645 locations, including 420 owned by the franchisor.

The company said it plans to open a total of 90 stores this year, but it did reduce the number of franchise openings from 50 locations to 30 because of "slower than expected nontraditional store rollout."

Clayton also reiterated previously disclosed plans to launch a new breakfast line systemwide next year, including hot, stuffed pocket sandwiches and spoonable "chunky smoothies." The breakfast items are being tested in one store in Emeryville.

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