Jamba, Inc. reported unaudited financial results for the first fiscal quarter ended April 2, 2013. The company recorded a quarterly comparable store sales increase of 3.6 percent for company-owned stores, driven by increases in store traffic and average check.
Jamba also reported solid increases in operating margin and royalty revenue from its expanding consumer product platforms. During the quarter, the company entered into a master franchise development agreement with Casa Operadora de Franquicias MAV S.A.P.I de C.V (“MAV”) to develop 80 Jamba Juice stores in Mexico over the next 10 years. The first Jamba Juice store in Mexico is expected to open in late 2013. The company also entered into a new domestic franchise partnership that will open 15 stores in Missouri and Kansas over the next nine years. Jamba’s 125 California store expansion initiative has been fully subscribed and is sold out.
For the 13 weeks ended April 2, 2013, total revenue increased 3.8 percent to $55.1 million from $53.0 million in the prior year period. The increase is due to the 3.6 percent increase in company-owned comparable store sales and increased franchise revenue and consumer packaged goods (CPG) sales. The increase in company-owned comparable store sales of 3.6 percent was driven primarily by an increase in transaction count of 130 basis points and an average check increase of 230 basis points. During the 13 week period ended April 2, franchise-operated comparable store sales decreased 0.9 percent. Franchise and other revenue increased 29.6 percent to $3.9 million from $3.0 million in the prior year period. Jamba’s CPG revenue was $1.0 million in the 13 week period ended April 2, 2013, compared to $0.4 million in the prior year period.
Jamba’s operating margin improved by 70 basis points to 2.4 percent for the first quarter of 2013 compared to 3.1 percent for the quarter ended April 3. On a dollar basis, the $(1.3) million loss from operations for the first quarter of 2013 was a $0.3 million improvement from the $(1.6) million loss from operations in the first quarter of 2012 reflecting the increased franchise revenue and CPG sales, and improved leveraging of fixed costs resulting from the company-operated store comparable sales growth.
On February 28, 2013, the company entered into a master franchise development agreement with MAV to develop 80 Jamba Juice stores in Mexico over the next 10 years. The first Jamba Juice store in Mexico is expected to open in late 2013. The principals of MAV, Mario Conzuelo Betancourt and Manuel Saba Ades, are seasoned executives operating food and beverage, and health and wellness retail businesses across Mexico and Latin America. Mario Conzuelo serves as CEO of the newly formed venture, and has previously launched and successfully developed a major international franchise beverage brand in Mexico. Manuel Saba serves as Chairman and CEO of Grupo Casa Saba, one of the leading distributors of pharmaceutical, health, beauty and consumer goods, general merchandise and publications in Mexico and South America.
As of April 2, system-wide, Jamba has 779 stores in the U.S., of which 479 are franchise-operated stores and 300 are company-owned. Franchise-operated stores include Jamba Smoothie Stations™, the new limited menu express format. During the quarter, Jamba opened eight new domestic franchise-operated stores, all non-traditional, and six international store locations, five in Canada and one in the Philippines. No new company-owned stores opened during the quarter. As of April 2, 2013 there were 41 international store locations, all of which are franchise-operated. During the quarter, the total number of JambaGO served locations increased to 548. As of April 2, three California locations offered the Fresh Squeezed Juice platform, with a target of up to 100 locations by the end of 2013.
On April 2, the company held $23.0 million in cash and cash equivalents as compared to $31.5 million cash and cash equivalents at January 1, 2013. On April 2, the company did not have any restricted cash. At the end of fiscal 2012, the restricted cash balance was $0.2 million.
“Our solid first quarter results, which came in the face of very strong year-ago performance, demonstrate Jamba’s ongoing momentum with increased traffic, average check and operating margin improvement,” said James D. White, chairman, president and CEO of Jamba, Inc in a prepared statement. “Our franchise development is strong with the addition of Mexico as our fourth major international market, and the execution of a multi-store domestic development agreement that will substantially increase our presence in the Midwest. Our accelerated California growth initiative is now completely sold out. And our plans for re-imaging stores and adding new concepts are on track for the balance of the year.”
“During the quarter we added new on-trend menu items, including new smoothie flavors for our Fruit & Veggie and JambaGO lines, our first nutritionist approved Jamba Kids Meals™ and continuing introductions from our Fresh Squeezed Juice platform containing fresh vegetables and fruits,” White said.
