DAVIDsTEA Shares Plummet As Q2 Sales Decline 19%; Founder Herschel Segal Retires

DAVIDsTEA Inc DTEA reported a second-quarter FY21 sales decline of 18.6% year-on-year, to C$18.74 million.
Sales from e-commerce and wholesale channels decreased by 32.2% Y/Y.
The gross profit declined 4.1% Y/Y to C$7.9 million, with the margin expanding 650 basis points to 42.7%.
The operating income for the quarter was C$74.5 million, including a gain of C$75.6 million from restructuring plan activities. Adjusted operating loss widened to C$(2.0) million.
DAVIDsTEA held C$12 million in cash and equivalents as of July 31, 2021.
Adjusted EPS was C$(0.07) versus C$(0.06) last year.
"The decline in second-quarter sales reflects last year's pandemic-fueled surge of online sales as we transition back to omnichannel sales this year," said Frank Zitella, President, Chief Financial and Operating Officer.
DAVIDsTEA announced the retirement of Herschel Segal, a founder and principal shareholder of the company, as a director and Chair of the Board. Jane Silverstone Segal, Herschel Segal's spouse, has been appointed as director and Chair of the Board.
Price Action: DTEA shares are trading lower by 15.46% at $2.79 on the last check Wednesday.