DAVIDsTEA (DTEA) investor relations material

Executive summary

• Sales grew 3.3% year-over-year to $11.5 million, driven by 9.6% growth in retail store sales and 4.4% comparable-store sales growth, demonstrating business model resiliency.

• Gross margin reached a record 61.9%, up 320 basis points, reflecting lower freight and shipping costs and benefits from internalized fulfillment.

• Net loss narrowed to $1.2 million from $1.6 million year-over-year; adjusted EBITDA improved by $0.7 million to $0.5 million.

• Two new stores opened in the Greater Toronto Area, with plans to reach 25 locations by year-end and similar expansion expected in 2027.

• Strong cash and liquidity position at quarter-end, supported by operational improvements and a private placement.

Financial highlights

• Sales totaled $11.5 million, up from $11.1 million in Q2 2025, with Canadian sales growing 5.5% to $10.5 million (91.5% of total revenue) and U.S. sales declining 15.2% to $1 million.

• Gross profit increased 9% to $7.1 million, with gross margin expanding to 61.9%.

• SG&A expenses as a percentage of sales decreased to 59.8% from 60.9%.

• Adjusted EBITDA reached $0.5 million, up $0.7 million year-over-year.

• Cash on hand was $10.2 million, with working capital at $17.1 million.

Outlook and guidance

• Store count expected to reach 25 by year-end, with similar expansion planned for 2027, subject to market conditions and funding capacity.

• U.S. sales are expected to improve in the second half of the year due to the new Chicago fulfillment center.

• Management anticipates further operational and cost efficiencies from the consolidation of Canadian operations.

• Cash is expected to reach a seasonal low in Q3 before rebuilding in Q4, consistent with historical patterns.

• Anticipates positive spillover effects on online and wholesale channels as retail footprint grows.