DavidsTea evaluating options, including sale, just two years after going public

DavidsTea evaluating options, including sale, just two years after going public

MONTREAL — Canadian beverage retailer DavidsTea is evaluating its strategic options more than two years after it went public and soon after rival Teavana shut its doors.

The Montreal-based company announced the move Thursday while reporting weaker than expected third-quarter results.

DavidsTea (NASDAQ:DTEA) says its losses surged 30 per cent to $6.5 million from $5 million a year ago.

That equals 25 cents per share for the three months ended Oct. 28, compared to 20 cents in the prior year.

Excluding one-time items, the loss nearly doubled to $4.5 million or 17 cents per share, compared to a loss of $2.4 million or 10 cents per share in the third quarter of 2016.

Revenues decreased 2.5 per cent to $43 million as same-store sales — a key retail metric for sales of existing stores — fell 6.8 per cent.

DavidsTea CEO Joel Silver said the lower same-store sales reflects challenges in accessories and kits that “did not excite the customer.”

He said the tea business was positive while e-commerce sales continued to grow.

DavidsTea says its board of directors decided to explore strategic alternatives, including a possible sale, in order to enhance shareholder value.

Starbucks closed its Teavana stores in July.

The Canadian Press

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