DAVIDsTEA (DTEA) Q1 2025 earnings summary

Executive summary

• Q1 fiscal 2025 sales rose 0.6% year-over-year to $13.5 million, with gross profit margin expanding to 51.1% from 43.3% in Q1 2024 and adjusted EBITDA reaching $1.6 million, an $2.4 million improvement from the prior year.

• Net loss narrowed significantly to $0.2 million from $2.6 million in the prior year, reflecting strong retail momentum and cost efficiencies.

• Retail store sales grew 11.5% year-over-year, with 2.8% comparable store sales growth, while online and wholesale channels saw single-digit declines.

• SG&A expenses were reduced by $1.5 million year-over-year, aided by a shift to a more cost-efficient IT platform and absence of prior year one-time charges.

• Hired new VPs for Wholesale and Online Sales/Digital Marketing to strengthen channel performance.

Financial highlights

• Consolidated sales increased 0.6% year-over-year to $13.5 million, with gross profit margin rising to 51.1% from 43.3% in Q1 2024.

• Adjusted EBITDA improved to $1.6 million from negative $0.8 million year-over-year, with an 11.7% margin.

• Net loss reduced to $0.2 million from $2.6 million in the prior year quarter.

• SG&A expenses dropped to $6.9 million, or 51.3% of sales, down from 62.9% in the prior year.

• Cash position at quarter-end was $10.4 million, up from $8.8 million year-over-year.

Outlook and guidance

• Plans to open new stores in the fall, including a relocation to a high-traffic Montreal suburb, supporting a targeted compound annual growth rate above 10% over the next three years.

• Anticipates typical seasonal softness in Q2 and Q3 but expects full-year profitability due to leaner cost structure and diversified channels.

• Strategic hires in wholesale and online channels to drive future growth.