Mixed 4Q at Jamba - Analyst Blog
March 07 2013 - 4:40AM
Zacks
Jamba Inc. (JMBA)
reported a loss of 9 cents per share in the fourth quarter of 2012;
a penny better than the Zacks Consensus Estimate and also ahead the
year-ago quarter’s loss of 15 cents per share. The company’s
growing operational efficiency was primarily responsible for the
bottom line improvement during the quarter. In the full year of
2012, loss was 3 cents per share versus 16 cents in the prior
year.
Total revenues in the quarter
remained almost flat year over year at $44.2 million but were below
the Zacks Consensus Estimate of $46 million. Although Jamba’s
quarterly revenues were positively impacted by higher franchise
revenues and new unit openings, it was more than offset by the
lower Company-owned store sales. In 2012, total revenues increased
1% year over year to $228.8 million.
Quarter
Highlights
Sales at the company stores were
down 1.9% year over year to $40.8 million in the fourth quarter.
Franchise and other revenues were $2.8 million, up 24.5% annually,
fueled by an increase in the number of franchise stores and higher
comparable store sales (comps).
Jamba, the leading restaurant
retailer of food and beverage offerings, experienced negative comps
of 1.2% in the reported quarter versus a rise of 7.7% in the
year-ago quarter. The decline in company-owned comps was caused by
lower traffic. Same-restaurant sales at franchise stores grew 2.3%
versus growth of 4.0% in the year-ago quarter.
Jamba’s adjusted operating profit
margin expanded 50 basis points (bps) to 12.7% in the quarter,
influenced by enhanced labor productivity.
Store Update
In 2012, 59 stores were opened,
among which one was Company-operated and the rest franchised. A
total of 19 stores were closed, of which 6 were company owned. Only
one store was refranchised. This brought the total number of stores
to 774, of which 473 were franchised and 301 Company-owned.
In 2013, Jamba plans to set up
60-80 new stores in international locations.
Financial
Position
The company exited the fourth
quarter with cash and cash equivalents of $31.5 million versus
$31.9 million in the previous quarter. Total liability was $60.2
million compared with $60.8 million in the third quarter.
Outlook
Emeryville, Calif-based Jamba
expects Company-owned comparable store sales growth of 4% -6% and
restaurant operating margin of 20%.
Our Take
Jamba is turning around at a slow
but steady pace. It is continuously gaining from its BLEND Plan 2.0
initiatives in terms of cost and efficiency and now expects that
its newly-launched BLEND Plan 3.0 would further augment its growth
in fiscal 2013. Jamba also intends to focus on the innovation of
new brands, advertising programs and product extensions. However,
lower traffic may negatively impact Jamba’s business going
forward.
Jamba currently retains a Zacks
Rank #3 (Hold). Another restaurateur Red Robin Gourmet
Burgers Inc.’s (RRGB) adjusted earnings in the fourth
quarter of 2012 were way ahead of the Zacks Consensus Estimate as
well as the year-ago quarter’s earnings. Red Robin Gourmet
currently carries a Zacks Rank #1 (Strong Buy).
Other restaurant companies like
Krispy Kreme Doughnuts, Inc. (KKD) and
Burger King Worldwide, Inc (BKW) both with a Zacks
Rank #2 (Buy) are expected to perform well, going ahead.
BURGER KING WWD (BKW): Free Stock Analysis Report
JAMBA INC (JMBA): Free Stock Analysis Report
KRISPY KREME (KKD): Free Stock Analysis Report
RED ROBIN GOURM (RRGB): Free Stock Analysis Report
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