Like its blended creations, Jamba (NASDAQ:JMBA) served up mixed results for its latest quarter.
Revenue clocked in at $44.2 million, essentially flat with the prior year's holiday quarter but short of the 4% advance that analysts were targeting.
The problem this time was sluggish performance at the smoothie chain's company-owned stores. Despite tacking on 45 more franchised stores over the past year -- and overall comps rising 0.6% fueled by a 2.3% boost at franchise-owned Jamba Juice locations -- company-owned store comps actually slipped 1.2%. This is the first time in two years that company-owned stores failed to generate positive comps.
The silver lining here is that Jamba's net loss of $0.09 a share was less than Wall Street was targeting.
I had three questions going into the report. All three were answered, so let's dive right in.
1. Can the positive comps keep coming?
The good news is that the systemwide streak of positive comps is still alive. Unfortunately for Jamba, the 1.2% decline at company-owned stores carries more weight than the 2.3% uptick at franchise locations. The franchise stores are greater in number, but they don't shape the top line's performance the way that the owned and operated smoothie shops do.
If you're going to slip when it comes to comps, this is the time to do it. Smoothie sales are seasonal. Starbucks and McDonald's -- the two retail giants that have pushed into smoothies in recent years -- can set aside their smoothie offerings to promote their warm coffee drinks during the wintry months, but Jamba's left trying to sell icy fruit beverages at a time when warm comfort food is craved.
The news wasn't good on this front, but it's not too big of a deal.
2. Will 2013 be the year of profitability?
All four major analysts with 2013 estimates were eyeing Jamba's first annual profit coming in 2013. Well, the blender baron came in a year early.
The good thing about only losing $6.9 million during the holiday quarter is that it was less than the $7.2 million profit that Jamba rang up during the first nine months of the year.
Jamba's $0.3 million net profit for all of 2013 may not be much -- it rounds down to breakeven -- but it's a historic event as the first profitable year for Jamba since it went public eight years ago.
3. Can it stick to its original 2013 guidance?
Jamba's sticking to its original outlook from November for the year ahead.
- Jamba's still looking for 4% to 6% comps growth at its company-owned stores in 2013, so the holiday dip appears to be a fluke.
- Store-level margins should be 20%, and operating income margins should be 2.5% to 3%. If you're curious, operating income margin for 2012 clocked in at 0.3%, so the improvement will be substantial.
- Jamba closed out the year with 774 domestic stores and 35 international locations. It plans to develop 60 to 80 largely franchised locations this year.
- Jamba is hoping to add 1,000 JambaGO stations. These are small, self-serve machines that go primarily in schools and commissaries. It's a big number, but Jamba's on it. JambaGO units went from 35 to 404 last year.
Consumer packaged goods are still a small part of this story, and Jamba's sticking to its goal of $4 million to $5 million in 2013 as it pushes out its canned energy drinks and other products.
Longtime Fool contributor Rick Aristotle Munarriz owns shares of Jamba. The Motley Fool recommends McDonald's and Starbucks. The Motley Fool owns shares of McDonald's and Starbucks. 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.