Ahead Of The Bell: Dropping Sales For Jamba Drinks

NEW YORK (AP) — Fruit smoothies chain Jamba Inc. core offerings are a "low priority purchase" for consumers during tough times, an analyst said Friday, a day after the company said sales fell 15 percent in the second quarter.

Its shares shed 5 cents, or 4 percent, to $1.20 in premarket trading on Friday.

Jamba owns and franchises Jamba Juice stores. The Emeryville, Calif., chain said Thursday that its loss for the period ended July 14 shrank 94 percent to $5.3 million, or 10 cents a share. That was due mostly to cost controls and the re-franchising of stores, said Jefferies & Co. analyst Jeff Farmer in a note to investors.

Meanwhile, sales at Jamba's company-owned stores open for more than a year dropped 13.7 percent. That measurement is a key indicator of retailer performance.

Farmer commended Jamba for launching its grab-and-go offerings. The company is depending on the flatbreads, wraps and salads to drive foot traffic and customer spending, he said, but it's too early to tell if that strategy is working.

CEO James White said in a statement that Jamba was pleased with the customer response to the grab-and-go line launched in June. The fruit smoothies can costs $3 to $6, depending on size and add-ins.

Farmer maintained his "Hold" rating on the stock.