Jamba, Inc. reported unaudited financial results for the first fiscal quarter ended April 19, 2011. The company continues to accelerate its transformation momentum with the delivery of positive comparable store sales across the system, the completion of its refranchising initiative, and the acceleration of its brand expansion through consumer products licensing.
For the first quarter ended April 19, 2011, total revenues decreased 17.7 percent to $66.2 million from $80.4 million in the first quarter ended April 20, 2010. The decrease is primarily due to the reduction in the number of company-owned stores as a result of the company’s refranchising initiative. The increase in company-owned comparable store sales of 2.2 percent was driven primarily by an increase in average check of 380 basis points, partially offset by lowered transaction count which we attribute to the weather impact on traffic. This represents the company’s second consecutive quarter of positive company-owned comparable store sales growth and reflects sequential improvement in seven of the last eight quarters. In the first quarter of 2011, system-wide comparable store sales increased 3.1 percent and franchise-operated comparable store sales increased 4.1 percent, compared to the prior year period. Franchise and other revenue increased 51.8 percent, driven primarily by the increase in the number of franchise-operated stores. Jamba’s CPG licensed revenue increased to $0.2 million in the first quarter of 2011 from essentially zero in the prior year period due primarily to the commercialization and sale of licensed Jamba consumer products at more than 20,000 retail points of distribution.
Jamba’s non-GAAP adjusted operating profit margin increased by 190 basis points to 14.0 percent for the first quarter of 2011 on a year over year basis and on a dollar basis decreased $0.4 million from the first quarter of 2010 reflecting the impact of refranchised stores. Non-GAAP adjusted operating profit (excluding refranchising) reflected an increase of $1.4 million and on a non-GAAP adjusted operating profit margin (excluding refranchising) rate reflected a 220 basis point improvement from 13.0 percent to 15.2 percent in the first quarter of 2011 as compared to the prior year period. Quarterly comparisons excluding the effects of the refranchising initiative from non-GAAP adjusted operating profit will be provided until the end of the first quarter of fiscal 2012, which represents the last refranchising year over year comparable quarter. The company continued to see efficiencies in the costs of sales and labor expense lines achieved through a smaller, more geographically concentrated and better performing company-owned store base as a result of its refranchising initiative. In addition, as a result of Jamba’s positive company-owned comparable store sales increase, the company started to leverage its fixed occupancy costs. During the quarter, the company invested aggressively in marketing to introduce its new beverage offerings, including an innovative probiotic and yogurt blends platform, and a fruit and vegetable platform. During the first quarter, the company also successfully launched its baked goods refresh which helped drive attachment rate higher.
