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Jamba Needs to Shake Things Up

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We're in peak smoothie-slurping season, and Jamba (NASDAQ: JMBA  ) wants to remind investors that it's still the top chain specializing in the blended fruit drinks.

The Jamba Juice parent has scheduled a conference call after next Monday's market close to provide an update on key business initiatives and review its outlook for next year. 

Things haven't panned out for Jamba after executing a reverse stock split four months ago. Shares have fallen 11% since then, bucking the generally upbeat market. This is unfortunate, because this is the time that Jamba has historically shined. Icy smoothies are consumed in greater quantities when the weather heats up, and that makes the summertime quarter that just concluded Jamba's money quarter.

Analysts see Jamba earning $0.38 a share for the quarter. That's a bigger number than Jamba shareholders are used to, and naturally the 1-for-5 reverse split inflates that figure. Jamba's quarterly deficits and earnings used to be scored in pennies, but now with shares outstanding being reduced by 80%, we're talking about nickels instead of pennies. However, even on a split-adjusted basis, we may be eyeing record results out of Jamba. Last summer quarter's profit of $0.04 a share gets adjusted to $0.20 a share, so we're seeing Wall Street banking on profitability nearly doubling this time around.

Clearly there's money to be made in smoothies. There's a reason that Starbucks (NASDAQ: SBUX  ) and McDonald's (NYSE: MCD  ) have thrown their blenders into the game. However, Jamba's been resilient, with system-wide comps moving higher in that stretch. 

It could be that Starbucks and McDonald's only offer two to three varieties. It could be that they lack the nutritional and functional boosts that Jamba patrons can have sprinkled into their beverages. However, it could also be that Starbucks and Mickey D's have made smoothies more popular to Jamba's advantage. After all, Starbucks adding smoothies validated the fruit drinks as premium. McDonald's adding smoothies to its McCafe line opened up drive-thru convenience, educating more of the market on the refreshing nature of the product.

One wonders why Jamba is hosting a dedicated conference call in the first place. It reports quarterly results a few weeks later. Is it really necessary? Does this update mean that Jamba has good news or a shortfall to report? Not necessarily. That probably would have been in yesterday's press release. It seems as if Jamba merely wants to get analysts and investors up to speed on its storefront initiatives, as well as the rollout of its JambaGo self-serve kiosks outside of its locations.

Jamba's stock chart has had a forgettable summer, so it's only natural for the company to remind the market why it is still worth remembering. 

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Related Tickers

9/23/2016 4:00 PM
JMBA $10.52 Down -0.09 -0.85%
Jamba CAPS Rating: **
MCD $117.17 Down -0.19 -0.16%
McDonald's CAPS Rating: ***
SBUX $54.43 Up +0.04 +0.07%
Starbucks CAPS Rating: ****