Jamba Juice 2009 Annual Report Download - page 39

Table of Contents
Improving our Company Store financial performance. We implemented several store-level savings initiatives designed to, among other things: lower
costs of goods sold through reformulations and waste improvements; improve store labor savings through operational simplifications, provide better wage and
benefit management, and realize the positive effect of our labor planning system; achieve rent and occupancy savings through re-negotiations with landlords
and store closures; and reduce controllable and other store costs as a result of better cost controls and processes and the re-negotiations of service contracts.
Reducing our general and administrative expenses. We have eliminated positions and implemented other cost reduction activities. We have also
identified technology enhancements that should improve our efficiencies by automating current manual processes. We believe the actions we have taken to date
put us on track to achieve our 2009 target for G&A expense to be less than 10% of total revenue, before share-based compensation expenses.
Hiring a permanent CEO and strengthening the management team. In fiscal 2008, we experienced significant changes in our executive management
team, including the departure of our chief executive officer, chief financial officer, senior vice president, operations, senior vice president and chief marketing
and brand officer, and senior vice president, development. On December 1, 2008, James D. White joined the Company as President and Chief Executive
Officer. In addition, as a result of the above-referenced departures, we internally promoted other members of the executive team and increased their
responsibilities. We believe this executive team can execute on our revitalization strategies.
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In fiscal 2009, we will continue to focus and execute on our revitalization efforts. To that end, the strategic priorities for fiscal 2009, which are described
in more detail in Part I, Item 1 “Business,” include:
• building a customer first “operationally focused” service culture;
• building a retail food capability across all four day parts (breakfast, lunch, afternoon, and dinner);
• accelerating the development of franchise and non-traditional stores;
• building a consumer products growth platform; and
• continuing to implement a disciplined expense reduction plan.
There is significant uncertainty with respect to the economy in fiscal 2009. While our revitalization plan addresses factors we can control, we can only
mitigate the significant effect an adverse economic environment has on most retailers, including those dependent to a large extent on discretionary consumer
spending. Accordingly, we expect to report flat or negative comparable store sales for fiscal 2009. We are also targeting:
• Cost of sales at or below 26% of Company Store revenue after giving effect to increased cost pressure on commodities.
• Labor costs at or below 34% of Company Store revenue.
• Other controllable costs at or below 3.5% of Company Store revenue.
• General and administrative expenses at or below 10% of total revenue, before share-based compensation expense.
We also plan minimal new Company Stores development and 50 or more new Franchise Stores, mostly in the non-traditional format.
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The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires the appropriate application of
certain accounting policies, many of which require management
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