|Voir version imprimable|
- Sales of
- Net loss of
- SG&A expenses down 21.9% year-over-year to
- Series of value creation initiatives planned to drive sales growth
- Order fulfillment activities to be taken in-house for enhanced consumer experience
“We are encouraged by the early results of our cost-containment plan, although consumer confidence continued to be dampened by challenging economic conditions in the first quarter of fiscal 2023,” said
“Our focus remains on implementing value creation initiatives that will drive sales growth. Key initiatives include: improving the online customer experience through updated product information and storytelling; the upcoming release of a shoppable mobile app; expanding our wholesale footprint into the
“Due to persistent headwinds in the economic environment, sales declined 29.4% year-over-year to
“As we assessed the strengths and weaknesses of our ability to provide a best-in-class consumer experience, we concluded that a change was required in our order fulfillment operations. We are pleased to announce that starting in the third quarter, we will be fulfilling consumer orders in-house to better support the fast service and elevated brand experience consumers expect from a premium online retailer like DAVIDsTEA,” added
Operating Results for the First Quarter of Fiscal 2023
Three Months Ended
Sales. Sales decreased 29.4% to
Sales continue to be impacted by unfavorable economic conditions that dampen consumer demand. We also believe that our e-commerce revenues have been impacted by order fulfillment difficulties encountered in the fourth quarter that left many consumers frustrated. As a result, on
Tea and variety box assortment sales decreased by 28.5% or
Online sales of
Sales from the wholesale channel decreased by
Brick-and-mortar sales declined by
Gross profit. Gross profit dropped by 29.7% to
Selling, general and administration expenses. Selling, general and administration expenses (“SG&A”) of
EBITDA and Adjusted EBITDA1. EBITDA was negative
Net loss. Net loss totaled
Fully diluted net loss per share. Fully diluted net loss per common share amounted to
Liquidity and Capital Resources
Working capital was
The Company’s primary source of liquidity is cash on hand and cashflow generated from operations. Working capital requirements are driven by the purchase of inventory, payment of payroll, ongoing technology expenditures and other operating costs.
Working capital requirements fluctuate during the year, rising in the second and third fiscal quarters as
Condensed Consolidated Financial Data
(Canadian dollars, in thousands, except per share information)
|For the three-months ended|
|Cost of sales||8,541||12,079|
|Selling, general and administration expenses||7,853||10,050|
|Results from operating activities||(2,081||)||(1,842||)|
|Adjusted net loss 1||(1,883||)||(1,219||)|
|Adjusted fully diluted loss per common share1||$||(0.07||)||$||(0.05||)|
|Gross profit as a percentage of sales||40.3||%||40.5||%|
|SG&A expenses as a percentage of sales||54.9||%||49.5||%|
|Cash flows used in operating activities||$||(1,465||)||$||(1,678||)|
|Cash flows used in financing activities||(770||)||(749||)|
|Cash used in investing activities||(622||)||—|
|Decrease in cash during the period||(2,857||)||(2,427||)|
|Cash, end of period||$||19,583||$||22,680|
|Accounts and other receivables||2,769||3,258|
|Prepaid expenses and deposits||4,992||5,839|
|Trade and other payables||$||9,057||$||12,310|
1 Please refer to “Use of Non-IFRS Financial Measures” in this press release.
Use of Non-IFRS Financial Measures and Ratios
This press release includes “non-IFRS financial measures and ratios” defined as including: 1) EBITDA and Adjusted EBITDA, 2) Adjusted net (loss) income, and 3) Adjusted fully diluted (loss) income per common share. These non-IFRS financial measures are not defined by or in accordance with IFRS and may differ from similar measures reported by other companies. We believe that these non-IFRS financial measures provide knowledgeable investors with useful information with respect to our historical operations. We present these non-IFRS financial measures as supplemental performance measures because we believe they facilitate a comparative assessment of our operating performance relative to our performance based on our results under IFRS, while isolating the effects of some items that vary from period-to-period but not in substitution to IFRS financial measures.
Please refer to the non-IFRS financial measures and ratios section in the Company’s Management’s Discussion and Analysis for a reconciliation to IFRS financial measures.
This release should be read in conjunction with the Company’s Management’s Discussion and Analysis, which is filed by the Company with the Canadian securities regulatory authorities on www.sedar.com and will also be available in the Investor Relations section of the Company’s website at www.davidstea.com.
Caution Regarding Forward-Looking Statements
This press release includes statements that express our opinions, expectations, beliefs, plans or assumptions regarding future events or future results and there are, or may be deemed to be, “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”). The following cautionary statements are being made pursuant to the provisions of the Act and with the intention of obtaining the benefits of the “safe harbor” provisions of the Act. These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes”, “expects”, “may”, “will”, “should”, “approximately”, “intends”, “plans”, “estimates” or “anticipates” or, in each case, their negatives or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our strategy of transitioning to e-commerce and wholesale sales, future sales through our e-commerce and wholesale channels, our results of operations, financial condition, liquidity and prospects, and the impact of the COVID-19 pandemic on the global macroeconomic environment.
While we believe these opinions and expectations are based on reasonable assumptions, such forward-looking statements are inherently subject to risks, uncertainties and assumptions about us, including the risk factors discussed in Management’s Discussion and Analysis of Financial Condition and Results of Operations for our fiscal year ended
Conference Call Information
A conference call to discuss the first quarter Fiscal 2023 financial results is scheduled for
DAVIDsTEA Investor Relations
1 For a reconciliation of EBITDA and Adjusted EBITDA to the most directly comparable measure calculated in accordance with “IFRS”, see “Use of non-IFRS financial measures and ratios”, in this press release.