JMBA - Jamba Juice

[SI]

Earlier you had been saying revenue growth in multiple posts, now you mean traffic growth then is the reason for its $1mn intrinsic value estimate. So we do not want to count mix or price? If sales down 20bps without including new stores, are you sure even traffic is down? 30 new stores over 890 total stores I count to be 3.3% increase. Are you saying that traffic per existing store is down and that's why creditors are looming in a business that is responsible for cashing franchise checks with net cash on the balance sheet????

[TheAiGuy]

Earlier you had been saying revenue growth in multiple posts, now you mean traffic growth then is the reason for its $1mn intrinsic value estimate. So we do not want to count mix or price? If sales down 20bps without including new stores, are you sure even traffic is down? 30 new stores over 890 total stores I count to be 3.3% increase. Are you saying that traffic per existing store is down and that's why creditors are looming in a business that is responsible for cashing franchise checks with net cash on the balance sheet????

 

No, I do not want to count mix or price. Traffic is more important than price as a measure of the desirability of the product. You could argue that price was the more important if they could raise prices without losing traffic, but they can't. (edit: revenue is what ultimately counts, but I'm arguing that traffic predicts revenue)

 

The measure the company disclosed is "Percentage Change in Comparable Company store sales", you can decide what you think that means.

 

that's why creditors are looming in a business that is responsible for cashing franchise checks with net cash on the balance sheet????

From their news release (b/c there is no 10k, still not over that):

Liquidity

 

As of January 3, 2017, the Company held $7.1 million in cash and cash equivalents, as compared to $19.7 million cash and cash equivalents at December 29, 2015. As of January 3, 2017 and December 29, 2015, the Company had restricted cash of $0.5 million and $0, respectively.

 

I dunno, that looks like cash burn to me.

[TheAiGuy]

I'm kinda done with this one, but I'd like to point out that management has lowered their guidance for 2017 and has a financial incentive to try a turn around.

 

But, honestly, I don't really care.  Let me know if you make money on this and I will happily admit I'm wrong

[KJP]

 

The problem with the company is revenue, namely that its shrinking,

 

Other posters have touched on it above, but what does revenue shrinkage really mean in the context of franchising company-owned stores?  More precisely, what do you mean by "revenue . . . shrinking."

 

Big picture -- fewer people are buying Jamba Juice each year. You can keep franchisees operating with low ROCs, but if franchisees are actually loosing money, they will go out of business, and it will be hard to sell more franchises. Moving from a company owned model to a franchise model is shuffling deck chairs if no one wants to buy Jamaba Juice, and it looks like more and more people are deciding they don't.

 

Thanks for the clarification. 

[atbed]

This may have bottomed. I have been adding. Seems cheap at 8x NTM EBITDA (not adding back stock comp) and below a market NTM PE multiple.

[eclecticvalue]

I wonder if the juicing craze is taking market share from Jamba Juice. If you take a look at Pressed Juicery and Juice Press, they seem to have a cult following and you barely have to wait in line for a healthy drink. The store footprint is small.

[atbed]

I wonder if the juicing craze is taking market share from Jamba Juice. If you take a look at Pressed Juicery and Juice Press, they seem to have a cult following and you barely have to wait in line for a healthy drink. The store footprint is small.

 

I actually think juicing is waning in popularity here in NYC. It still has its core followers, but I don't think it was as popular as it was a few years ago.

 

IMO, juicing just isn't as healthy as consuming the entire fruit. Why waste the pulp? Also pressed juices ($10-15) are significantly more expensive than smoothies. I have a hard time seeing people around the country paying those sort of prices.

 

In comparison, smoothies are relatively affordable. I believe juicing has provided air cover. It created an impression and raised awareness for drinking fruit. I just have an easier time seeing $6-7 smoothies gain strength around the country than $10-15 pressed juices.

[TheAiGuy]

Update: this company is still terrible and still hasn’t filled a 10Q/K.  7% yoy decline in traffic. Random question, does anyone know how to short a stock?

 

http://ir.jambajuice.com/mobile.view?c=192409&v=203&d=1&id=2317566