DAVIDsTEA Stays the Course in the Second Quarter

Core Insights - DAVIDsTEA Inc. reported its financial results for Q2 2025, showing a slight increase in sales but challenges in online sales growth [1][3][6] Financial Performance - Total sales for Q2 2025 reached $11.1 million, a 0.5% increase from the previous year [3][6] - Canadian sales accounted for 89.6% of total revenue, increasing by 3.7% year-over-year, while U.S. sales decreased by 20.6% to $1.2 million [3][5] - Gross profit margin was 47.2%, down from 47.3% in the prior year [6][7] - The net loss remained stable at $1.6 million, with adjusted net loss increasing to $1.8 million from $1.0 million in the prior year [11][12] Sales Channels - Brick-and-mortar sales increased by 9.1% to $4.6 million, representing 41.0% of total sales [4][5] - Online sales decreased by 6.7% to $5.1 million, accounting for 45.9% of total sales [5][6] - Wholesale channel sales improved by 2.5% to $1.5 million, representing 13.0% of total sales [5][6] Operational Strategy - The company is focusing on an omnichannel growth strategy, emphasizing retail store expansion and community marketing efforts [2][4] - Renovations are underway for the flagship store in Montreal, with plans for new store openings in Quebec City and Mississauga [2][4] Cost Management - Selling, general and administrative expenses (SG&A) were stable at $6.7 million, with a decrease in IT-related expenses contributing to improved cost efficiency [8][9] - SG&A as a percentage of sales declined to 59.8% from 60.5% in the prior year, reflecting better operating leverage [9][10] Liquidity and Capital Resources - As of August 2, 2025, the company had $7.6 million in cash and working capital of $11.4 million, down from $12.8 million in February 2025 [14][15] - Capital expenditures for Q2 2025 were $97 thousand, significantly lower than $312 thousand in the prior year [16][22]