Wedbush Reiterates OP on Jamba (JMBA) Following Mixed Q1 Results

Wedbush reiterates their Outperform rating on Jamba (NASDAQ: JMBA), and maintains a price target of $18.00 following mixed Q1 results. JMBA reported an adjusted EPS loss of $0.06 the consensus of a $0.03 loss. JMBA reported company-owned same-store-sales performance of 6.0%, which came out ahead ahead of Wedbush's 5.2% estimate. JMBA also reiterated FY15 plans for an accelerated re-franchising effort. FY15 plans of 90/10 offered in late April are up from the 80/20 target offered previously.

Wedbush analyst, Phil Terpolilli , commented on JMBA, saying, "We are maintaining our OUTPERFORM on Jamba Juice. JMBA’s reported 1Q15 results came in below our expectations on profitability. However, a solid comparable store sales performance we believe was overlooked by investors, as well as the potential benefits related to more rapid re-franchise conversion efforts in FY15. We believe recent non-smoothie innovation gives Jamba better path towards sustainable comp sales growth trends.
On the refranchise front, accelerated pull-forward refranchising efforts should allow Jamba to kickstart its asset-light strategy. Last, on the cost front high costs reported in 1Q are expected to take a gradual step-down over the course of FY15 including workstream initiatives to benefit labor, as well as new SKU line and supplier/distributor changeover related to fresh juice to benefit COGS."

Terpolilli also added, "On the one hand, Jamba’s results have admittedly been choppy over the last several years, likely hindered by execution, structural pressure on the company’s core smoothie business, and consistent shift in strategies. However, we believe the company has set itself up to experience material sales/earnings and new store growth in FY15/16 from a strategic focus on non-smoothie product innovation and its asset-light refranchise strategy. Given current store growth rates and using median peer valuation, we believe JMBA shares are attractive into 2H15."

For an analyst ratings summary and ratings history on Jamba click here. For more ratings news on Jamba click here.

Shares of Jamba closed at $15.22 yesterday.

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