David’s Tea co-founder David Segal is pictured at a DavidsTea outlet in Toronto on Tuesday, Feb. 9, 2016. THE CANADIAN PRESS/Chris Young

David’s Tea co-founder David Segal is pictured at a DavidsTea outlet in Toronto on Tuesday, Feb. 9, 2016. THE CANADIAN PRESS/Chris Young

DavidsTea Inc. reports $9.1M loss in third quarter, sales up 1.5 per cent


DavidsTea Inc. reported a more than $9-million loss in its most recent quarter that was marked by wild share price swings, but the retailer’s co-founder, who led a recent shareholder revolt, says he’s confident in the tea purveyor’s ability to turnaround its financial performance.

The Montreal-based retailer reported Thursday that its consolidated net loss surged 40 per cent to $9.1 million or 35 cents per diluted share for its third quarter ending Nov. 3. That compared with a net loss of $6.5 million or 25 cents per share for the same quarter the previous year.

Its adjusted net loss was $7.4 million or 28 cents per share compared with a $4.5-million loss or 17 cents per share in the third quarter of its 2017 financial year.

“We are seeing favourable trends in several areas of the business,” said Herschel Segal, who is serving as interim CEO, during a conference call with analysts after markets closed. The call lasted less than 15 minutes and analysts were not permitted to ask questions, a customary practice for most quarterly calls.

Segal took over as executive chairman of the company’s board and interim CEO earlier this year after 54 per cent of shareholders at the annual general meeting voted in favour of Segal’s slate of seven directors over the management nominees. The loss prompted then-CEO Joel Silver to resign.

At the time, Segal pledged that the chain will become profitable within a year.

For the second set of quarterly results under his leadership, sales increased 1.5 per cent to $43.7 million from $43 million in the same quarter of 2017.

Segal highlighted the company’s e-commerce and alternative sales channels as “showing great promise.”

DavidsTea’s online sales account for 16 per cent of its volume and the company needs to increase this portion of its business significantly, he said.

Sales of its tea sachets in 450 Loblaw stores, as well as on Air Canada flights, and in certain hotels and offices is going very well, he said.

Still, same-store sales fell 4.7 per cent during the quarter.

That drop reflects the company’s decision to reduce its dependency on discounting, said chief financial officer Frank Zitella, who started in the role this week. That resulted in less product available for the retailer’s semi-annual sale, he said.

The company’s shares on the Nasdaq composite experienced volatile highs and lows during the quarter, so much so that the company released two statements indicating it was “not aware of any corporate development or other reason for the recent market activity.”

First, on Sept. 21, shares soared nearly 60 per cent before plummeting about 25 per cent at close. The following month, on Oct. 2, shares closed up about 63 per cent from US$2.55 to US$4.16.

The company did not comment on this during the call, though some suggested the activity came from speculation DavidsTea might be looking to somehow enter the cannabis space.

The shares closed up 10 cents or 5.3 per cent to US$1.99 in Thursday trading.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Chris Scott, owner of The Whistle Stop Cafe, was put in handcuffs after an anti-restriction protest Saturday in the parking lot of the business. (Screenshot via The Whistle Stop Facebook page)
UPDATE: Central Alberta cafe owner arrested after anti-restriction protest

The owner of a central Alberta cafe, which was the site of… Continue reading

Alberta has 1,910 active cases of COVID-19 as of Wednesday. Red Deer is reporting five active cases, with 108 recovered. (File photo)
Red Deer now has 911 active COVID-19 cases

Central zone has 2,917 active cases

Red Deer Regional Hospital Centre's expansion project is still a high priority, says Alberta Infrastructure Minister Prasad Panda. (File photo by Advocate staff)
Red Deer hospital ICU admissions stable, but rising, says surgeon

The Red Deer Regional Hospital Centre’s intensive care unit is in better… Continue reading

Alberta recorded a single-day record of over 57,000 doses of COVID-19 vaccine administered. (Photo courtesy Alberta Health Services Twitter)
Alberta hits daily record of COVID-19 vaccine doses administered

Central zone has administered 111,735 doses of the COVID-19

FILE - A firefighter wears a mask as he drives his truck. THE CANADIAN PRESS/Jonathan Hayward, File
VIDEO: Flames rip through Edmonton-area seniors complex, but no fatalities

ST. ALBERT, Alta. — Fire has destroyed part of a retirement complex… Continue reading

Dr. Robert Strang, Nova Scotia's chief medical officer of health, is setting off a social media reaction with his calls to stop non essential shopping, such as "buying sandals at Costco", with this photo of his worn sandals, which he published to social media on Saturday, May 8, 2021. THE CANADIAN PRESS/HO-Dr. Robert Strang, *MANDATORY CREDIT*
Nova Scotia’s top doctor sparks meme with caution on non-essential shopping

HALIFAX — Nova Scotia’s top doctor has launched a social media meme… Continue reading

Chief Public Health Officer Theresa Tam speaks during a technical briefing on the COVID pandemic in Canada, in Ottawa on Friday, Jan. 15, 2021. Canada's chief public health officer is reminding Canadians even those who are fully vaccinated are not immune from transmitting the COVID-19. THE CANADIAN PRESS/Adrian Wyld
Tam warns that full vaccination does not equal full protection from COVID-19

Canada’s chief public health officer reminded Canadians on Saturday that even those… Continue reading

Carolina Hurricanes coach Rod Brind'Amour conducts drills during NHL hockey training camp in Morrisville, N.C., Wednesday, Jan. 6, 2021. (AP Photo/Gerry Broome)
NHL relaxing virus protocols for vaccinated playoff teams

The NHL is relaxing virus protocols for teams that reach a threshold… Continue reading

Canada skip Kerri Einarson directs her teammates against Sweden in a qualification game at the Women's World Curling Championship in Calgary, Alta., Saturday, May 8, 2021. THE CANADIAN PRESS/Jeff McIntosh
Canada’s Einarson eliminated at curling worlds after 8-3 loss to Sweden’s Hasselborg

CALGARY — Canada’s Kerri Einarson was eliminated at the world women’s curling… Continue reading

Jennifer Coffman, owner of Truffle Pigs in Field, B.C., poses beside her business sign on Thursday, May 6, 2021, in this handout photo. Her restaurant and lodge have been hit hard by a closure of a section of the Trans-Canada Highway and by the British Columbia government discouraging Alberta residents from visiting during the pandemic. THE CANADIAN PRESS/HO-Jennifer Coffman, *MANDATORY CREDIT*
‘Why we survive’: B.C. boundary towns struggle without Albertans during pandemic

Jennifer Coffman didn’t expect to get hit with a double whammy at… Continue reading

A courtroom at the Edmonton Law Courts building, in Edmonton on Friday, June 28, 2019. The effect of the coronavirus pandemic will have a lasting impact on the Canadian justice system warn a number of legal experts. The Alberta Court of Queen's Bench announced Sunday it would adjourn all scheduled trials across the province for at least 10-weeks limiting hearings to only emergency or urgent matters. THE CANADIAN PRESS/Jason Franson
Edmonton mother found guilty of manslaughter in death of five-year-old girl

EDMONTON — An Edmonton woman was found guilty Friday of manslaughter in… Continue reading

A Statistics Canada 2016 Census mailer sits on the key board of a laptop after arriving in the mail at a residence in Ottawa, May 2, 2016. THE CANADIAN PRESS/Sean Kilpatrick
Statistics Canada sees more demand to fill out census online during pandemic

OTTAWA — Statistics Canada says the response to the census is higher… Continue reading

Travellers, who are not affected by new quarantine rules, arrive at Terminal 3 at Pearson Airport in Toronto, Monday, Feb. 22, 2021. Ottawa will create a new digital platform to help in processing immigration applications more quickly and efficiently after COVID-19 pandemic underscored the need for a faster shift to a digital immigration system, the immigration department said. THE CANADIAN PRESS/Frank Gunn
Ottawa to create new system to tackle delays in processing immigration applications

Ottawa says it will create a new digital platform to help process… Continue reading

Most Read