DAVIDsTEA (DTEA) investor relations material

Executive summary

• Returned to IFRS profitability in Fiscal 2025 with net income of $2.9 million, reversing prior year losses and marking a $6.1 million improvement year-over-year.

• Fourth quarter net income reached $5.3 million on revenue of $23.5 million, more than doubling year-over-year.

• Retail-led omnichannel strategy drove comparable store sales growth of 6.8% for the year and 6.6% in Q4.

• Adjusted EBITDA nearly doubled to $7.6 million for the year, with Q4 Adjusted EBITDA at $5.4 million.

• Cost structure improvements, including SG&A savings of over $4 million, supported profitability.

Financial highlights

• Fiscal 2025 sales were $61.0 million, down 1.3% year-over-year; Q4 sales were $23.5 million, up 1.2%.

• Gross margin expanded to 58.6% for the year and 58.9% in Q4, up 430 basis points year-over-year.

• SG&A expenses for the year decreased to $28.8 million, or 47.2% of sales, with Q4 SG&A as a percentage of sales at 36.2%.

• Free cash flow for the year was $954,000, with $8.0 million generated in Q4.

• Cash at year-end was $16.5 million, with working capital of $17.7 million.

Outlook and guidance

• Four new retail stores to open in Fiscal 2026, targeting 25 locations by year-end and aiming to double the Canadian footprint medium-term.

• Each new store targets annual sales of $1.2–1.4 million with a 25% four-wall contribution margin and a 15–18 month payback period.

• U.S. sales expected to recover in the second half of Fiscal 2026, supported by a new Chicago-based fulfillment partner.

• Capital expenditures and investments will increase to support store openings and omni-channel growth.

• Targeting a sales CAGR of over 10% over the next three years, with sustained low double-digit Adjusted EBITDA margins.