rlxdoc

Jamba Juice Should Bear Fruit by Mid-2009

Your Q4 forecast is based off of an 11 week period in 2007. I believe that this year's Q4 should be approximately 7-8% higher in sales. This modeling error follows through to 2009 also. Your comp assumption seems a little low. The two year comp stack is -3.3% (in Q3) which implies -4% in Q4 and mid single declines in Q1 & Q2. The oatmeal should help sales (and visits?) although not do much for profits.

I heard Mr. White speak recently and he appears competent and capable. Still this is a longish play. I get to a forecast of $1.30 in mid-2010.

Jamba Juice: The Worst Already Factored In

JMBA has a complicated reporting structure that makes it difficult to analyze. Hopefully with the K we will finally get to some clarity about year over year trends. The lease debt a lot higher than $180m, but remember leases are both liabilities and assets. The lease debt is not out of line with sales.

Comps are weak, but not a disaster. California has a boom/bust economy, and although the housing market is awful, I don't see how that will impact the average JMBA customer (who is younger on average and more likely a renter).

Restaurants & retail in general do not go bankrupt easily, and lots of debt is required to push them over the edge. This seems unlikely in this case. At this rate losses would have to continue for 4 or 5 years before they'd work through the cash. Bottom line is that it is cheap, but there isn't any near term reason to own this one.