DAVIDsTEA (DTEA) Q4 2025 earnings summary

Executive summary

• Fiscal 2024 marked a pivotal turnaround with disciplined execution, incremental sales growth, improved gross profit, and positive cash flow from operations.

• Omnichannel strategy advanced, including new high-traffic mall stores, expanded wholesale partnerships, and two new retail store openings supporting wholesale and e-commerce sales.

• Brand resilience was demonstrated despite external disruptions, maintaining leadership in specialty loose-leaf tea.

• Net loss narrowed significantly year-over-year, with a return to profitability in Q4.

Financial highlights

• Fiscal 2024 revenue reached CAD 61.8 million (up 1.9% year-over-year); Q4 revenue was CAD 23.2 million, down 4.6% due to a shorter quarter and postal disruption.

• Adjusted EBITDA for the year was CAD 3.9 million, a positive swing of CAD 9.3 million; Q4 Adjusted EBITDA was CAD 4.0 million, up from CAD 500,000 last year.

• Q4 net income was CAD 2.5 million, compared to a loss of CAD 3.9 million in the prior year; annual net loss was CAD 3.2 million, a $10.6 million improvement.

• Gross profit for the year increased 21.9% to CAD 29.5 million; annual gross margin rose to 47.8% from 39.9% year-over-year.

• Ended the year with CAD 16.2 million in cash and generated free cash flow of CAD 7.3 million.

Outlook and guidance

• Targeting 10–12% compound annual sales growth over the next three years by expanding Canadian retail, U.S. wholesale, and digital channels.

• Aiming to sustain gross profit margins in the 48–50% range through fulfillment and supply chain optimization.

• Projecting annual cost savings of CAD 4 million from IT platform transition and discretionary spending controls.

• Expecting adjusted EBITDA margin to reach low double digits by fiscal 2027, up from mid-single digits in 2024.