DAVIDsTEA (DTEA) Q1 2025 earnings summary

Executive summary

• Fiscal 2025 began with strong momentum, reflecting progress in the turnaround strategy and omnichannel growth initiatives.

• Retail channel sales grew 11.5% year over year, with 2.8% comparable and same-store sales growth.

• Gross profit margin expanded to 51.1% of sales, driven by improved product margins and lower fulfillment costs.

• SG&A expenses were reduced by $1.5 million year over year, aided by a shift to a more cost-efficient IT platform.

• Adjusted EBITDA reached $1.6 million on $13.5 million in sales, with an 11.7% margin.

Financial highlights

• Consolidated sales increased 0.6% year over year to $13.5 million.

• Net loss reduced to $0.2 million from $2.6 million in the prior year quarter.

• Adjusted EBITDA improved to $1.6 million from negative $0.8 million year over year.

• Gross profit increased 18.6% to $6.9 million due to higher product margins and lower shipping/fulfillment costs.

• SG&A expenses dropped to $6.9 million, or 51.3% of sales, down from 62.9% in the prior year.

Outlook and guidance

• New store openings planned for the fall, including a relocation to a high-traffic Montreal suburb.

• Targeting a compound annual revenue growth rate of over 10% across three years.

• Anticipates typical seasonal softness in Q2 and Q3 but expects full-year profitability.

• Strategic hires in wholesale and online channels to drive future growth.

• Expects continued positive momentum in e-commerce and wholesale channels.