December 13th, 2017

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

By The Canadian Press on December 7, 2017.

DavidsTea is listing as "DTEA" at the Nasdaq MarketSite in New York on June 5, 2015. THE CANADIAN PRESS/AP, Mark Lennihan

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.

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