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Jamba, Inc. (NASDAQ:JMBA) today reported unaudited financial results for the third fiscal quarter ended October 1, 2013.
As previously disclosed, Jamba’s results for the quarter were impacted by constraints on consumer spending and adverse weather in key markets. As a result, same store sales, revenue, income from operations and operating margins all declined for the quarter compared with the prior year period.
Despite the challenging environment, the Company had important accomplishments that set the stage for future growth. JambaGO™ express smoothie units are opening in over 1,000 retail locations across the country, the largest expansion to date. Fresh-squeezed premium juice, now being added to a growing number of California units, is boosting same store sales. A recently initiated major cost and productivity program is expected to yield significant savings.
“We faced a challenging quarter that was atypical of our past performance during which we had more than two years of same store sales growth. But we believe the setbacks will be transient while the growth prospects resulting from our achievements will be long term,” said James D. White, chairman, president and chief executive of Jamba. “We have a powerful position in the on-trend, fast growing healthy food, beverage and premium juice segments. Our domestic and international development prospects are growing. Our digital marketing programs are now in high gear with the National rollout of the ISIS Mobile Wallet launch. And our JambaGO expansion will give many customers who are new to Jamba the opportunity to experience our great smoothies.”
Highlights for the 13 weeks ended October 1, 2013, compared to the 13 weeks ended October 1, 2012:
Net income was $2.7 million, or $0.15 (1) diluted earnings per share for the quarter, compared to net income of $4.1 million, or $0.21 (1) diluted earnings per share for the prior year period.
Comparable store sales (2) for the quarter decreased 5.5% for company-owned stores, 1.3% for franchise-operated stores and 3.4% system wide.
Total revenue was $61.4 million compared to total revenue of $65.5 million for the prior year period.
Income from operations was $3.3 million and operating margin was 5.4% for the third quarter of 2013.
General and administrative expenses decreased 13.3% to $8.4 million compared with $9.7 million for the prior year period.
During the quarter, franchisees opened 29 new stores globally -- 26 in the U.S., which included 12 smoothie stations, and three new international stores.
Third Quarter Fiscal 2013 ResultsRevenue
For the 13 weeks ended October 1, 2013, total revenue decreased 6.3% to $61.4 million from $65.5 million in the prior year period. The decrease is due to the 5.5% decrease in company-owned comparable store sales
(2), partially offset by the increase in franchise and other revenue of $0.6 million. The decrease in company-owned comparable store sales
(2) of 5.5% primarily reflected a decrease in transaction count of 880 basis points partially offset by an average check increase of 330 basis points. This decline in comparable store sales was primarily as a result of constraints on consumer spending, adverse weather in key markets, increased competition and the impact of promotional campaigns. During the 13-week period ended October 1, 2013, franchise-operated comparable store sales
(2) decreased 1.3%. Franchise and other revenue increased 15.8% to $4.3 million from $3.7 million in the prior year period. Revenue for CPG and JambaGO was $0.8 million in the 13 week-period ended October 1, 2013, compared to $0.7 million in the prior year period.
Income from Operations and Operating Margin
Jamba’s operating margin was 5.4% for the third quarter of 2013 compared to 6.9% for the quarter ended October 1, 2013, a decrease of 150 basis points. Income from operations for the third quarter of 2013 was $3.3 million compared to $4.5 million for the third quarter of 2012, a 26.9% decrease, reflecting the effects of decreased company-owned comparable store sales, partially offset by the increased franchise revenue and reduced general and administrative expenses.