The following is a summary of the DAVIDsTEA, Inc. (DTEA) Q4 2023 Earnings Call Transcript:
Financial Performance:
DAVIDsTEA reported a decrease in total sales to $12.1 million in Q3 2023, down from $16.2 million in Q3 2022.
Online sales dropped by 45.1% year-over-year.
Gross profit margin showed improvement at 37.9%, due to lower unit cost in fulfilling online orders.The company reported net losses of $3.7 million, marking an improvement from $4.7 million in Q3 of 2022.
Adjusted EBITDA was reported at negative $2.5 million compared to negative $2 million for the same quarter last year.
The company maintained discipline in its cost control measures leading to reduced SG&A expenses.
The company ended Q3 with $11.7 million in cash and working capital of $20.1 million, without any interest-bearing debt.
Business Progress:
DAVIDsTEA initiated new go-to-market strategies and strengthened its marketing team to stimulate growth, which includes entry into the U.S. wholesale market and further expansion in Canada.
Adriana Germilli was appointed as Vice President of Marketing and Damon Sloane as Chief Digital Officer in order to strengthen the company's brand and online customer service.
Expansion in existing Canadian markets was facilitated via store-in-store models.
As part of improving the brand experience, the company internalized delivery services, resulting in an efficient fulfilment of Black Friday orders and better order processing.
There was a significant increase in wholesale channel sales by 56.3% to $2.5 million, hence raising its contribution to total revenues from 10% to 21%.
The company is on track with its cost-cutting measures, targeting a reduction of $8 million to $10 million for the fiscal year.
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