Posted on January 27, 2021 by Scott Shuda
Good article this morning on Seeking Alpha updating the bull case on David’s Tea (DTEA).
With the continued strong momentum in its e-commerce and wholesale channels, DavidsTea posted another quarter of impressive growth in its two main distribution channels. In the third quarter, sales from e-commerce and wholesale channels increased by 145.5% to $22.1 million from $9.0 million in the prior-year quarter. As part of its formal restructuring process, the company exited all of its unprofitable brick-and-mortar stores except for 18 Canadian stores which were reopened on August 21, 2020. These 18 flagship stores generated $4.1 million in the third quarter, resulting in average sales per store of around $230 thousand over this ten-week period. By comparison, in the third quarter last year, average sales per store over the usual 14-week period have been approx. $130 thousand. Thus, sales per store in 2020 increased by 75% despite a shorter comparison period of 4 weeks. Against the background of the current COVID-19 pandemic, these results from its reopened stores are quite promising.
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