Jamba's guidance is anything but smooth
The specialty beverage company cuts its fiscal 2013 outlook, sending investors fleeing.
In Jamba's release regarding "Key Business Initiatives," the company said that for stores open at least one year, sales growth will be "flat to 1%." Jamba had previously guided for growth of 4% to 6%. The company cited a decrease in consumer spending, poor weather in "key markets," and more competition in the space as the culprits for lackluster growth. Jamba also expects profit margins to be smaller than originally forecast.
Motley Fool analyst Matt Argersinger thinks Jamba's key problem is the competition. Given that smoothies and juices are available in various other specialty drink stores like Robeks, as well as leviathan chains like Starbucks (SBUX) and McDonald's (MCD), Jamba faces an uphill battle.
Jamba investors have had a rough ride since the company went public eight years ago, and Matt thinks the stock will continue to be a speculative play.
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Never tried it, but I'm sure its just another Starbuck wannabee, $4 for a cup of juice.
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