Jamba Plans to Expand in California - Analyst Blog
November 26 2012 - 7:30AM
Zacks
Jamba Juice Company, a subsidiary
of Jamba Inc. (JMBA), is planning a massive
expansion in its home-court California, over the next six-to-seven
years. The company’s growth plans include the launch of up to 120
stores in more than 100 business areas and 25 mall locations across
Northern, Central and Southern California.
Jamba Juice currently operates more than 788 stores. The company
plans to open the new stores through both new and existing
franchises. It is also preparing for the launch of many
company-owned stores.
The company’s founding state, California, remains an ideal location
for development as it is one of the most populous and widespread
state in the U.S. The promising restaurant industry in this state
is a major driving force to the U.S. economy. In 2012, the total
revenue from the restaurant sector in California is projected
around $63.8 billion.
We believe that the development plan will further strengthen Jamba
Juice’s position in its prime California market, going forward.
However, the company will likely face stiff competition in that
area from its peers like Starbucks Corporation
(SBUX) and Caribou Coffee Company Inc. (CBOU).
Jamba has always remained focused on expansion and expects
accelerated growth in both core existing markets as well as new
geographic areas. For 2012, Jamba plans to open 40–50 new stores in
the U.S. locations and 15 new stores internationally. In 2013, the
company plans to further speed up its development process by
opening 60 to 80 U.S. and international stores.
Jamba, currently carries a Zacks #3 Rank, which translates into a
short-term ‘Hold’ rating. Our long-term recommendation for the
stock remains ‘Underperform’.
CARIBOU COFFEE (CBOU): Free Stock Analysis Report
JAMBA INC (JMBA): Free Stock Analysis Report
STARBUCKS CORP (SBUX): Free Stock Analysis Report
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