DAVIDsTEA Reports Strong Turnaround in Fiscal 2024

Davidstea Inc. ( (DTEAF) ) has released its Q4 earnings. Here is a breakdown of the information Davidstea Inc. presented to its investors.

DAVIDsTEA Inc., headquartered in Montréal, Canada, is a leading North American tea merchant offering a wide range of high-quality proprietary loose-leaf teas, pre-packaged teas, and tea-related accessories through various channels including e-commerce, wholesale, and retail stores.

DAVIDsTEA has reported a notable improvement in its financial performance for the fourth quarter and full fiscal year 2024, marking a successful turnaround. The company achieved a 2% increase in sales, reaching $61.8 million, and significantly narrowed its net loss to $3.2 million, showcasing a $10.6 million improvement over the previous year.

Key highlights from the earnings report include a positive adjusted EBITDA of $3.9 million, an increase of $9.3 million from the previous year, and a free cash flow of $7.3 million. Despite a slight decline in fourth-quarter sales, the company achieved a net income of $2.5 million, a $6.4 million improvement, driven by increased gross profit margins and reduced selling, general, and administrative expenses.

Looking ahead, DAVIDsTEA plans to focus on expanding its retail presence in Canada, accelerating its wholesale expansion in the U.S., and enhancing its online platform. The company aims to achieve a sales compound annual growth rate of 10-12% over the next three years, with a goal of raising its gross profit margin to 48-50% and achieving an adjusted EBITDA margin in the low double digits by fiscal 2027.

As DAVIDsTEA enters fiscal 2025, it is well-positioned for growth with a strong cash position of $16.2 million and a strategic plan to navigate the uncertain trade environment. The company remains committed to leveraging its diversified supply chains and innovative product offerings to drive future profitability.