This Initiative Could Turn Jamba Juice Into a Superstar

Jamba Juice’s lackluster performance may see a much-needed boost.

Jul 17, 2014 at 8:00AM

Source: Jamba Juice

It should come as no surprise to learn that with the cold, refreshing beverages Jamba (NASDAQ:JMBA) serves, it's the company's time to shine when it's hot out. With its chilly first-quarter results now in the rearview mirror, the all-important summer months are now in bloom and may determine the fate of the company going forward. This will be a time that will test its new whole foods blended drinks.

The juicy results
Jamba reported fiscal first-quarter results on May 8. Revenue slipped 7.4% to $51.6 million. Systemwide same-store sales ticked up 0.3%. Net loss dropped significantly from $1.2 million to $0.2 million. Jamba cited bad winter weather as a headwind.

Jamba's net loss improved despite the  overall revenue drop.  This was partially due to lower costs from delayed marketing expenses. Jamba is rolling out its new "Whole Food Blending and Juicing platform" nationally, and the company saved its marketing budget for this roll-out during the seasonally superior second and third quarters.

Thickening the blend
The company may expect the whole foods blend to be a game-changer. Back in January, Jamba announced a platform that included whole foods such as vegetables, seeds, and Greek yogurt. It sounds like a meal in a drink and Jamba is marketing it to customers as such because they can enjoy it for breakfast, lunch, or a snack on-the-go.  

Going forward, James D. White, CEO of Jamba, stated in the earnings release, "We're redefining good-for-you fruit and vegetable juices, smoothies and blends as a foundation for active, healthy living." Earlier in the same release he mentioned that results "will vary" by quarter during the roll-out but the company is confident about its guidance.


Source: Jamba Juice

Vary by quarter? It reads like Jamba's executives don't entirely know how successful the roll-out will be, which could be very good or a not-so-good thing. The company guided for same-store sales growth of between 2% and 4%. It plans to add between 60 and 80 new locations this year which is significant for a chain with only 854 locations at last count.

You are what you drink
During the conference call, the company executives offered more words of encouragement. White stated, "The popularity and momentum for juicing continues to grow from a coastal trend to a mainstream health and wellness option to add more whole foods to our diet and is spreading across the country."

He believes Jamba Juice's brand name gives it instant credibility and a "very strong" competitive advantage in this area. White added, "I've never seen our franchise community more energized by a launch in the 5 years that I've been with the company."

It seems like Jamba is going with the Chipotle Mexican Grill bandwagon in terms of marketing. While it doesn't claim to be GMO-free or any of that, White did say "freshly squeezed whole foods, blended straight from the earth." It's a similar message of "all natural."


Source: Jamba Juice

Summer of love for nutrition
Jamba will make the whole foods blend available at three times as many locations this summer, from an almost immaterial 20% of the chain during the cold months to more than half of the system by the end of the summer. The raw numbers will then give us some idea of whether it had a material impact on Jamba's same-store sales.

Jamba could use a boost. For a while now it has shown lackluster results although its bottom line has improved because of cost cutting and refranchising. Oftentimes a quick-serve company is just one great product innovation away from great results and growth again. Fools should keep a close eye on Jamba to see if this is it. 

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Nickey Friedman has no position in any stocks mentioned. The Motley Fool recommends Chipotle Mexican Grill. The Motley Fool owns shares of Chipotle Mexican Grill. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information