The board of DAVIDsTEA Inc. will explore strategic alternatives to increase shareholder value, the Canadian specialty tea retailer said Dec. 7 as it reported third-quarter results.
Possible options to be considered for DAVIDsTEA include financing, refinancing, restructuring, merger, acquisition, joint venture, divestiture or disposition of assets. No timeline was established for the board's review of strategic alternatives, but the company plans to undergo the process of choosing financial advisers for the initiative in the "near term."
Meanwhile, the company named Howard Tafler as CFO, effective immediately. He had been serving as interim CFO since August.
DAVIDsTEA also lowered its 2017 capital expenditure outlook to a range of C$13 million to C$15 million, down from the previous range of C$15 million to C$18 million forecast Sept. 7 with the release of second-quarter results.
For the third quarter ended Oct. 28, the company reported sales of C$43 million, down 2.5% from C$44.1 million in the year-ago period, while comparable sales decreased 6.8%. Gross profit was C$18.4 million, dropping 10.2% year over year from C$20.5 million.
Net loss was C$6.5 million, up from a net loss of C$5.0 million in the 2016 quarter, while fully diluted loss per share came in at 25 Canadian cents compared to 20 cents in the year-ago period. The results included an impairment charge of C$2.7 million due to underperforming stores.