DTEA - DAVIDsTEA prelim Q4 sales down ~25% Y/Y co to temporarily layoff 15% of staff

• DAVIDsTEA ( NASDAQ: DTEA ) on Thursday announced cost-cutting measures including temporary layoffs and provided preliminary Q4 sales results.
• Shares of the Canadian tea merchant initially gained more than 10% in postmarket trading after the announcement, but have since reversed course and are now down 1% to $0.97.
• DTEA said it would temporarily layoff 15% of its head office staff and eliminate "IT transformation investments" of C$4M undertaken in 2022.
• The company expects its SG&A costs on a pro-forma basis to be reduced between C$8-10M in FY 2023.
• "Like many other retail brands, we experienced difficult market conditions in the fourth quarter as consumer wallets were impacted by rising inflation and higher interest rates that reduced demand," DTEA CEO Sarah Segal said in a statement .
• Additionally, DTEA said it expects Q4 sales to be between C$29M to C$31M. In Q4 2021, DTEA had reported sales of C$39.9M.
• FY 2022 sales are expected to be between C$80M to C$82M. DTEA had reported sales of C$104.1M in FY 2021.

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