Wsj:
Smoothies maker Jamba Inc. says it is on a “journey to simplify healthy living,” but it could be a lumpy ride.
Competition in fruit-and-dairy drinks is intensifying as big players like McDonald’s Corp. enter the fray. Jamba’s largest market, California, is struggling economically.
The company lost $113.3 million last year, and it is now slowing expansion plans. Management is predicting same-store sales this year of minus 2% to plus 2% — in other words, possibly flat.
All of which helps explain why Jamba shares are selling for less than half their initial-public-offering price three years ago. Analysts are lowering revenue expectations and forecasting another loss this year.
Some on Wall Street are tired of waiting for an upturn. “Jamba needs execution in 2008,” says Morgan Joseph & Co. analyst Dean Haskell. Among his concerns is the “discrepancy between $4 to $5 smoothies and tightening consumer wallets.” He rates the stock at hold.
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