Jamba's guidance is anything but smooth

The specialty beverage company cuts its fiscal 2013 outlook, sending investors fleeing.

By Motley Fool Investor Beat Oct 8, 2013 2:17PM
Smoothie slinger Jamba (JMBA) sent investors scurrying for the exits Tuesday in the wake of announcing lowered guidance for the 2013 fiscal year. Shares have fallen as much as 20% in intraday trading.

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.Image: Arrow Down (© Kyu Oh/Photodisc/Getty Images)

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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4Comments
Oct 8, 2013 6:14PM
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It might be because customers are finally waking up and realising how many calories those things contain!  For something that's marketed as healthy it sure as hell ain't!!
Oct 8, 2013 4:36PM
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Jamba Juice is WAY too expensive. This doesn't surprise me.
Oct 8, 2013 5:31PM
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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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