DAVIDsTEA Slips To Loss; Stock Down 11%

(RTTNews) - Canadian specialty tea and tea accessory retailer DAVIDsTEA Inc (DTEA) on Tuesday said it slipped to a loss for the first quarter, hurt by one-time losses that offset a 29 percent climb in sales.

The company, which made its debut on the Nasdaq earlier this month, said it expects to post adjusted loss for the current quarter as well, while projecting profit for the full year 2015.

DAVIDsTEA shares slid about 11 percent in after-hours trade on the Nasdaq, following the announcement.

The Montreal-based company posted first-quarter net loss of C$93.2 million or C$7.73 per share, compared with a profit of C$1.4 million or C$0.07 per share last year.

Results for the recent quarter included a $90.7 million loss from embedded derivative on certain preferred shares.

Excluding items, adjusted earnings for the quarter were C$0.04 per share, compared with C$0.06 per share a year ago.

The company's sales for the quarter increased 29 percent to C$35.8 million from C$27.8 million in the prior year.

Comparable sales increased 6.3 percent.

Gross margin for the quarter fell to 53.3 percent from 56.6 percent a year ago, hurt by a stronger dollar and an investment in supply chain.

For the second quarter, DAVIDsTEA projects sales of C$30 million to C$31 million and adjusted loss of C$0.09 to C$0.08 per share.

For the fiscal year 2015, the company expects sales of C$170 million to C$174 million and adjusted earnings of C$0.33 to C$0.38 per share.

DTEA closed Tuesday at $29.16, up $1.91 or 7.01%, on the Nasdaq. In after hours, the stock dropped $3.40 or 11.66% at $25.76.