Wednesday, March 10, 2010

Jamba Reports; Stock Drops

Well, those who were buying heavily last week in anticipation of strong results were mistaken.  By the numbers, it wasn't too strong.  They missed on EPS, revenue, and same store sales weren't great.

The key here though is everything they've been rolling out likely hasn't had a chance to be reflected in earnings, so anyone selling is jumping the gun here.  Hot beverages are just being rolled out.  Their relationship with Core-Mark will give them access to thousands of convenience stores.  All of that will take time to roll out.

I listened to the call last night, and I continue to be impressed with management, and their plan for growing this company and brand.  Here are a couple of tidbits I picked up:

-They are strengthening the balance sheet with $31.5 million in cash and basically no debt.

-They are selling off corporate owned stores to franchisees.

-They are expanding to one international market this year, with more likely to come.

-They now have a range of products that make them not only a year-round option, but they are capitalizing on healthy options for fast food, which is going to be a huge market.

-They did mention that coffee is something they'll be looking at, but will only add it if they can put their own twist on it.

I plan on adding to my position, maybe even today.

Disclosure: Long JMBA

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