DTEA - DAVIDsTEA rallies 36% post Q2 results

DAVIDsTEA (DTEA) reported Q2 revenue decrease of 41.2% Y/Y to C$23M due to the COVID-19 pandemic.Sales from e-commerce and wholesale channels increased by 189.9% Y/Y to C$23M.E-commerce and wholesale sales represented 100% of sales compared to 20.2% of sales in the prior year quarter.The Company only reopened 18 stores subsequent to quarter-end.Adj. gross margin declined 1,950 bps to 36.2%.Adj. SG&A margin declined 3,060 bps to 37.2%; due to lower selling expenses resulting from the closure of all stores effective March 17, 2020.Adj. EBITDA margin increased 507 bps to 6.09%; as a result of a reduced G&A infrastructure to support the on-going business.As of August 1, Co. had C$34.3M of cash primarily held by major Canadian financial institutions and working capital was negative C$13.2M.“We are confident that we are well-positioned to execute our business plan and to sustain a return to profitability once the ongoing CCAA process and our transformation is complete,” said Frank Zitella, COO and CFO.Shares +36.12% PMPreviously:

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DAVIDsTEA rallies 36% post Q2 results