The Healthy and Active Lifestyle Take of Jamba, Inc. (JMBA)

In a January 14 press release, Jamba, Inc. (NASDAQ:JMBA) Juice Company, the country’s leading smoothie chain, announced an initiative for changing the store format and design that truly reflects the “active and healthy lifestyle” concept that the company wishes to promote. The new design will cover new limited menu Smoothie Stations, drive-through facilities and Juice bars. Existing stores are to be refreshed in the next four years.

New Entrants

The health concept of Jamba, Inc. (NASDAQ:JMBA) made Starbucks Corporation (NASDAQ:SBUX) add juice bars in its outlets, and McDonald’s Corporation (NYSE:MCD) added smoothies to its coffee house style outlets, McCafe. Starbucks was already serving smoothies before it included juice in 2011 with the acquisition of Evolution Fresh, an American company known for, among other things, artisanal super-premium fruit juices.

With multi-billion dollar companies entering the field, many people thought that it was just a matter of time before Jamba, Inc. (NASDAQ:JMBA) Fruit prepared its farewell speech or was taken over. But it was not to be. Instead, fruit juice in the world’s largest burger chain and the king of coffee houses worked to make people, and with it the market, aware of the potential of the “health concept.” Just as Starbucks did wonders with coffee decades ago, inclusion of juice in its outlets gave fruit juice the premium label that it deserved.

Stock Performance

Evolution Fresh was acquired on November 10, 2011, and as if by a signal, the Jamba stock started its uphill journey almost from that date. From Nov. 11, 2011 to March 5, the day of the earnings call of its Q4 and fiscal year 2012 results, the stock has appreciated 67.25%.

Fourth Quarter/Fiscal Year 2012 Earnings

For the first time since it went public, Jamba, Inc. (NASDAQ:JMBA) reported a net income for the full year in its annual report for the fiscal Year 2012, released on Feb. 5, 2013.

Loss in the fourth quarter was of $6.9 million. This was however, less than the $9.8 million loss reported for Q4 prior year. Sales at company-owned stores declined by 1.2%, whereas franchise operated stores reported an increase of 2.3% in sales. Revenue for the quarter was almost the same as Q4 prior year – $44.2million.

However, revenues were up from $226.4 million in the prior year to $22.8.8 million in the fiscal year ended Jan. 1, 2013. The 1% increase was due to a 5.1% increase in sales in company-owned stores. Net income for the full year was $0.3 million as compared to a loss of $8.3 million in the previous year, mostly due to an increase of 5.1% in system-wide and franchise-operated store sales.

Although Jamba, Inc. (NASDAQ:JMBA) menus include warm drinks, the problem is that the focus product is more of a seasonal business – mostly spring and summer. As such, instead of quarterly, annual results are more reflective of the company’s financial performance.

Competitors

In a true sense, there is no public listed company apart from Starbucks that can be termed as Jamba’s competitor. Other competitors include privately owned companies like Maui Wowi Franchising and Smoothie King.

Even Starbucks is too big a company to be compared with Jamba, Inc. (NASDAQ:JMBA). With a market cap of $42.34 billion, it is almost 200 times the value of Jamba (market cap: $221.17 million). Juice, for Starbucks is but one segment and a new one at that. In March 2012, it opened its first store, named Evolution Fresh, centered on juice instead of coffee for which Starbucks is famous for. A writer at USA Today termed the event as “Goodbye grind, welcome squeeze.”