DAVIDsTEA, a leading tea merchant in North America, saw increasing sales during its second quarter for the period ended August 3, the company announced on Tuesday.
Key financial highlights include:
- Sales of $11.1 million, an increase of 12.8 per cent over the prior year;
- Gross profit margin of 47.3 per cent, significantly better compared to 36.9 per cent in prior year;
- SG&A expenses of $6.7 million, down 15.2 per cent versus prior year;
- Net loss of $1.5 million, improved from loss of $4.3 million in prior year:
- Adjusted EBITDA1 of negative $0.3 million versus negative $2.6 million in prior year;
- New store opened September 5 in Montreal’s Royalmount Mall; and
- Additional store opening in the Montreal Eaton Centre expected in early November
“We are pleased to report that DAVIDsTEA reached a key inflection point in the second quarter of 2024 with sales increasing by 12.8 per cent year-over-year,” said Sarah Segal, Chief Executive Officer and Chief Brand Officer, DAVIDsTEA. “We are grateful for the trust of our loyal consumers who seek out the best flavour profiles available on the market as we continue to innovate and introduce new and incredible tasting tea blends for consumers to enjoy.
“Sales momentum continues into the early third quarter with revenues up more than 18 per cent compared to the same period in 2023. We are excited to mark our renewed focus on brick-and-mortar retail with the opening of a new location in the Royalmount Mall in Mount Royal, Quebec, and look forward to launching a new store in downtown Montreal in early November, raising the total number of flagship stores to 20. As we prepare for the revenue-intensive third and fourth quarters, our focus remains on delivering excellent value, service and innovation to our consumers.”
Frank Zitella, President, Chief Financial and Operating Officer, said the financial results are moving in the right direction as the company continues to execute its operational strategy.
“Revenues are up and costs are down, both year-over-year and sequentially, across all categories. We also have significant leverage in our business model, which positions us well for the second half of the year as we stabilize the business against unfavourable headwinds and double down on investments in both our brick-and-mortar and online operations,” he said.
DAVIDsTEA offers a specialty branded selection of high-quality proprietary loose-leaf teas, pre-packaged teas, tea sachets, tea-related accessories and gifts through its e-commerce platform and the Amazon Marketplace, its wholesale customers which include over 4,000 grocery stores and pharmacies, over 1,500 convenience stores in Canada and 170 grocery stores in the United States, as well as 19 company-owned stores across Canada.
