Jamba Inc. (JMBA), the leading restaurant retailer of food and beverage offerings, recently reported its second quarter 2011 preliminary comparable store sales results.
The Emeryville, California-based company posted system-wide comparable sales growth of 2.9% in the second quarter of 2011, driven by innovative menu offerings and marketing initiatives. Jamba witnessed positive company-owned comparable store sales for the third consecutive quarter since 2007.
Comps at company-owned restaurants jumped 4.3% in the reported quarter as against a decline in the year-ago quarter and upside of 2.2% in the previous quarter. Company-owned same-store sales also improved sequentially, representing sequential growth in eight out of the preceding nine quarters.
Same-restaurant sales at franchise stores also jumped 1.4% in the second quarter, but dropped sequentially. During the first quarter of 2011, franchise same-store sales rose 4.1%.
In the first quarter of 2011, revenues fell 17.7% year over year to $66.2 million. The decline in revenues was primarily due to the shift from company-owned store sales to royalties and franchise fees as a result of a refranchising initiative.
For fiscal 2011, the company expects same store sales in the range of 2%-4%.
The Zacks Consensus Sales Estimate for the second quarter of 2011 is $56 million while the same for fiscal 2011 is $218 million. The Zacks Consensus EPS estimates for the second quarter and fiscal 2011 are pegged at earnings of 3 cents and loss of 16 cents, respectively. The estimates have not budged in the last 30 days. Hence, we do not foresee any surprises during the earnings release and expect the company to report in line.
Financial results for the second quarter of 2011 are scheduled for release on August 16, 2011.
The stock has a Zacks #4 Rank, implying a short-term Sell rating. We also reiterate our long-term Neutral recommendation on Jamba.
One of its competitors, McDonald's Corp. (MCD) posted global comparable sales growth of 5.1% in July on the back of strong beverage sales as well as core menu offerings and promotional activities. However, the fast-food chain operator witnessed a relatively downward movement on a year-over-year basis across all regions but Europe. Comparable sales growth stepped down from 7.0% in July 2010.
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