DAVIDsTEA Inc. (NASDAQ:DTEA) Q4 2023 Earnings Call Transcript
DAVIDsTEA Inc. (NASDAQ:DTEA) Q4 2023 Earnings Call Transcript December 12, 2023
Operator: Good morning, ladies and gentlemen. Welcome to DAVIDsTEA's Third Quarter Earnings Webcast for fiscal 2023. Today's webcast is being recorded and is in a listen-only mode. Before we get started, I would like to remind you of the company's Safe Harbor language. This presentation includes forward-looking statements about expectations for the performance of the business in the coming quarter and year. Each forward-looking statement contained in this presentation is subject to risks and uncertainties that could cause actual results to differ materially from those projected in such statements. Additional information regarding these factors appears under the heading Risk Factors and Uncertainties in the Management, Discussion, and Analysis of financial condition and results of operation, the MD&A, which was filed with the Canadian regulatory authorities and is available on www.sedarplus.ca, as well as in the investor relations section of the company's website at davidstea.com.
The forward-looking statements in this discussion speak only as of today's date, and the company undertakes no obligation to update or revise any of these statements. If any non-IFRS financial measure is used on this call, a reconciliation to the most directly comparable IFRS financial measure will be detailed in the MD&A. As a reminder, all dollar amounts referred to are in Canadian dollars unless otherwise indicated. Now, I would like to turn the call over to Sarah Segal, Chief Executive Officer and Chief Brand Officer of DAVIDsTEA.
15 Biggest Tea Producing Countries In The World
Sarah Segal: Thank you, operators. Good morning, everyone. The economic environment remains uncertain, particularly in Canada, but we are taking proactive steps to stimulate demand creation, drive innovation, and elevate our brand to position the company for long-term profitable growth. As expected, sales remained muted in the third quarter of 2023 due to a persistent challenging economic environment and order fulfillment issues experienced in the fourth quarter last year that contributed to lower online sales. Accordingly, total sales amounted to $12.1 million in the third quarter of 2023 compared to $16.2 million in the third quarter of 2022. As shared with you during our last webcast, we internalized fulfillment services to both Canadian and U.S. consumers during the summer months and have observed tangible improvements in the overall customer experience.
As a result, we are confident about meeting an expected increase in consumer demand during the revenue-intensive fourth quarter, including the holiday season. On the sales front, we have launched a series of go-to-market initiatives and announced key marketing hires to help drive growth. Key initiatives aligned with our growth strategies include: firstly, we started penetrating the U.S. wholesale market during the third quarter with the release of four flavors of premium tea sachets at 150 Stop and Shop supermarkets of the 400 plus locations in the northeastern United States. This regional chain of grocery stores operates through Massachusetts, Connecticut, Rhode Island, New York, and New Jersey. On a smaller scale, we introduced five tea flavors at Roche Brothers Supermarket.
This family-owned business operates in 20 locations across Massachusetts. Our strategy involves step-by-step launches along the U.S. East Coast to gauge customer pace and gradually replicate the success we have enjoyed in Canada. Secondly, we expanded our footprint in the Canadian wholesale market to more than 4,000 doors by growing our presence with existing partners and adding new accounts. DAVIDsTEA recently introduced six tea sachet flavors at 220 Staples Canada stores. The company also brought eight popular tea flavors to 47 Farm Boy grocery stores in Ontario. In Quebec, we entered the Jean Couture and Brunet Pharmacy accounts through the release of 12 holiday teas and 12 winter classic tea discovery kits. These seasonal products are available at select pharmacies during the holiday season with the potential for an expanded offering in upcoming months.
See also 12 Best Non-REIT Dividend Stocks To Invest In and Wall Street Analysts See Upside Potential for 10 Stocks with Rising Price Targets.
To continue reading the Q&A session, please click here.
