DAVIDsTEA Inc. (NASDAQ:DTEA) shares rose Wednesday after the company announced it will seek court authorization for Companies' Creditors Arrangement Act.
Last week, the company reported fourth-quarter revenues of $40.2 million with 96% increase in e-commerce and wholesale sales.
Adjusted EBITDA was $5.4 million in the quarter and $9.7 million for the full year. Cash proved to be $30.2 million at quarter-end. Gross profit was $15.6 million for the three months ended January 30,, having decreased by $23.4 million or 60.0% from the prior year quarter due primarily to a decline in sales during the period.
As the Company pivots to a digital-first strategy, the cost of delivery and distribution that is included in arriving at gross profit will compare unfavorably to prior periods that were predominantly focused on retail sales distribution.
Restructuring activities ongoing and court order had been extended until June 4.
Said CEO Sarah Segal, "As a more agile organization, DAVIDsTEA can now rapidly align its business strategies with evolving consumer preferences. In a very short period, we have successfully pivoted to a digital first organization, as we continue to connect with our customers in new ways. We remain focused on expanding our omnichannel fulfillment capabilities in our retail locations, our subscription community and our service capacity with virtual tea guides online.
"A continued focus on tea excellence, innovation and product development are key to our ability to retain our loyal customers as well as attract new audiences of tea consumers."
DTEA shares rocketed 57 cents, or 17.7%, to $3.79.
