DTEA - Earnings call transcript Q4 2017

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Operator

Good afternoon. My name is Silvy and I will be your conference operator today. At this time, I would like to welcome everyone to the DAVIDsTEA's Fourth Quarter 2017 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remark, there will be a question-and-answer session. you. Thank Instructions] [Operator to Officer call of like Tafler, to Chief Financial DAVIDsTEA. turn would over the Howard I

Howard Tafler

Thank you. Officer. Good call is afternoon, everyone. With Silver, and me President Chief Executive Joel on the

to uncertainties Before started, the Harbor which statement that statements This assure the we I'm statement. performance about with. coming cause of projected to are quarter familiar includes I like contains of language all forward-looking get you in presentation the in remain Each would subject those this our business to Safe you forward-looking our for risks results year. and could actual from differ is presentation and materially such in expectations

obligation under and our website. Additional at Exchange Securities discussion factors heading on and risk XX-K, will www.sec.gov as subsequent and our statements directly filed revise used on and forward-looking no information be factors update to financial provided is a of presentation as will undertake or today's call, in this measure to IFRS be only with in measure regarding a of these most Commission financial financial appear available the call the this any statements. any information this measure financial in that this press these The our to be we release. comparable will If be date non-IFRS non-IFRS supplemental of

all joint of company's or continues include The restructuring; review of limited to consider assets ordinary venture; acquisition; committee board a not of strategic maximize the Directors a the or that of alternative the disposition financing; strategic value. course to: outside special the the are business. divestiture refinancing; some to As company's previously Board merger; of announced, but potential may alternatives of

we regarding understand, answer will process. this you questions no As will

President Executive and Now over to of Joel the call Officer Chief DAVIDsTEA. turn Silver, to I'd like

Joel Silver

Good us you, and joining thank for today. everyone, you Thank Howard. afternoon,

stores, our level the ongoing brand I I all Canadian value DAVIDsTEA fourth despite address a and fiscal XX.X would results, network the reached our million. to at indicate the forward EBITDA for the to stakeholders. of best our improving quarter is leadership In adjusted and before of discussions team between XXXX, performance some in our board committed U.S. DAVIDsTEA that charting realizing of First, shareholders, the and like path the

for the While when the than decline small demonstrate compared of results previous to quarters. previous lower X% the year, rate quarter a

X.X%. the sales For same X.X% comp to period, million by sales XX.X increased and decreased

double-digit our online tea the positive grow the quarter, growth. to continue On side business to continue core during register and sales

increased sales year, the in to penetration total e-commerce XX.X% XX.X% compared our of sales For to XXXX. fiscal

However, to continue as assortment mix. face and of we optimize season we sale the to holiday gifts and accessories improve continue challenges during the our tea in

up indicated seasons the made design of the As accessories for were and months before, advance. holiday in for assortment decisions the toXX

weaker had in positive we creating driven performance business non-tea momentum a initiatives. are While by several on XXXX our focused financial business, key through we

merchandising and cost into in in mentioned we the platform, our marketing took we savings and call, staff. systems reinvested the new last as well e-commerce particularly reduction substantial new As measures IT quarterly as

most holiday best-in-class and XXXX, stable we U.S. its the of made result, in a new be traffic, closure Teavana improvements Teavana, ongoing Amazon, alleviate further view, we're holiday new solid We're mall on-line September on fantastic some new first plans were better launch of a experience a to investment with to a stores concerns compared on season. in in will we selling have As shopping our provide of site did dollar our where represent of of the into essence positive seen mobile which e-commerce have of anticipate Last to launch, of in launching and and a will our October state marketing revenue terms completed of solid now happen to XXXX. [ph] to e-commerce demand position the features, years. mobile From network. we e-commerce is start already I'm were SG&A the we total quarter we Since point co-located basis. comparative goals speed, next Canadian platform. few significantly push relatively the platform provide and of that of stores conversion. the the closure in of year-over-year more Throughout over major and DAVIDsTEA's the the which observed anticipate will In a a additional sales on XXXX, the held enhancements happy and our your multi-million to provide impact mean to The load sales. allow of built us platform be which improving will website, core high improved ambitious The a the past experience challenges grow part now before remainder translating week, subsequent support our sales we ambitious XXXX.

pleased with to the concept DAVIDsTEA some a stores. as have X.X. for store to into stores format our store are We We new format initiatives new renovating of refer evolved related which this new

an improving buy customer XX% our signature This tea fact, Consequently, we purchase believe the the teas, renovation. of forward. service better in professionalism format format these that of could going improvement emphasis prepackaged innovation of are shop the X.X service future our our store in ongoing store thereby become has with that drive outside store will customer first into required DAVIDsTEA square .While stores Furthermore, at mall on consult Toronto. program. praised, store the time and new is levels model changes often employees had X.X experience. close customers, our to blueprint our of make The a store the sales waiting our format while accelerating remains seen help In one new a following and service The issue. been the comps to a

stores. store X.X this the format DAVIDsTEA for the will testing additional of begin with phase fall of five in second The year

remainder strategic fiscal new the translate the begin performance anticipate across some our remain we leadership will to implement by line XXXX team implant position business ahead, similar which challenging fiscal improved as We believe back alternative into stronger fiscal fully should cash and is for XXXX gain top Looking half complete first of is half flow, bottom at for somewhat the results. initiatives cash in and our that to the review I'll our merchandising Considering of remain the now levels solid product and throughout of to traction. offering million fourth balance at followed end quarter as CapEx XXXX detailed XX.X with XXXX. fiscal half projected their financial of fiscal full free able as position of lower call turn notably financial compared most the anticipated second a and We XXXX year-end the plans. fiscal XXXX. in remain of a to to Howard more cash of improve over

Howard Tafler

you, the Thank remarks my Joel. results. begin review I'll fiscal the of with quarter XXXX fourth

amounts stores X As reviewing ago. with a dollars. net C$XX.X reminder Canadian enter X.X% versus new referred dollar in XXX increase last results quarter XXX of Sales the stores, year fourth C$XX.X to We by to are in an million million increase our quarter the a the year. stores from in

was as quarter Gross sales accessory in new and XX.X% from year. with due Canada. During comp we by to X.X% percent X.X% profit to openings product Fourth profit costs the to assortment. X.X% X.X% profit the last a million decreased our a to The there as percent decrease to C$XX.X challenges primarily quarter, store negative C$XX.X continue a sales comparable gift were this gross of sales year last of Gross a as comp versus decreased deleveraging from ago. decreased fixed four the face year million quarter. of sales increase XX.X% in due

million Adjusted an quarter expenses from opened the also and C$XX.X hiring C$XX.X including stores, a SG&A of to X.X% the the year impact include additional to operating of company results C$XX.X owner's to the store impairment new quarter ago, underperforming for higher stores. of due of prior and to C$XX.X staff net in primarily fourth the X fourth growth considering in stores million support charge additional increased million Our contracts due million years.

a Adjusted million cost to of As fourth million from activities for C$XX.X the increased of XX.X% deleveraging percent last before. operating to last XX.X% fixed year. from C$XX.X adjusted from SG&A decreased to sales, results [ph] quarter year attributed

a as compared As share fully diluted net Adjusted result, C$XX.X EBITDA to compared diluted adjusted income million or or was fully per C$X.XX was million million to per year a C$X.XX ago. C$XX.X million. C$XX.X C$X.X share

normal more the as and to with decreased focused compared inventory As for a million period On including QX as us end, C$XX.X return clearance to basis, in buying inventory which were of per mainly C$XX.X enable last seasonal inventory store planned occurred the by year. same carryover. quarter to XX% was QX and million ending level

million the net no share position in our quarter terms on basis cash per of we liquidity, a of C$XX.X availability facility. In C$X.XX revolving debt ended a under C$XX and million cash credit on with with of

managing cash call final the Joel call to we to for are some before With over We questions. back our I'll turn and balance position prudently sheet. that, open the remarks your

Joel Silver

shareholders brand. for potential On on and began managed the go expanding focused operator Howard. you, behalf stable past marketing, management channel. of in and I merchandizing certainly for patience for the and to with a and great our We open strong our lines distribution of improving management, Thank on year. store fiscal plan conclusion, focus their questions. forward dedication ask business clear In and focused our work and thank team, the reinvestment XXXX now employees network, advance DAVIDsTEA I a will during the more maximizing is and strong business the e-commerce our a

Operator

of BMO comes first Your Instructions] question of [Operator line Capital Bania Markets. Kelly the from

open. Your line is

David Lans

Thanks Lans for Kelly the on Hi. for is This Bania. question. David taking

Joel Silver

how Hi, are you?

David Lans

tea I you comps us? breakout difference accessory core and between Good. for comps the could wondering, was

Howard Tafler

as where in We well but But we business trouble which the year the holiday had and is. that's and too. accessory our really holiday was - well tea business our breakup of weakness hard as most our good The for balance where business compact. healthy cost with really the includes don't quarter tea in we numbers, as is and gifts the the deliver

David Lans

Great, CapEx plan? is plan of side, CapEx the okay. and renovations And part then that on what the XXXX are any for

Howard Tafler

stores we as some infrastructure. to in of due have CapEx new was and of as investment do sort IT and indicated we well some plans have our as part we Yeah, renovation

David Lans

great, another to Amazon you Okay, the e-commerce And selling of very own follow-up. website? thank company's just probability What's then the on compared much.

Joel Silver

haven't right our think next we now early, so figured way as now is to Amazon, multiple through size ways focused out the all us it's sell now pieces, figured out I that's implementations. our been final too really there of for but

new answer that quarter. So better for I'll have

David Lans

well me excuse XX.X% question And growing what goal I quarter great. one the e-commerce, in then is of this how way with longer just are if double-digits penetration, has strong correctly new the XX% - in e-commerce Okay, investment I still reaching in and changed with that things remember sales, tracking mean last obviously pretty term XX.X there? dollar now the the multi-million site

Joel Silver

so Yeah. go there, year, lot our bit to No, our I more headwind we is what that through deliver around. ourselves there continue term holiday out think as was we than goals go to wrap a channel. we see we as that we we head But pushing through a this think again this short and of

David Lans

you thank Great, much. very

Operator

this no back to call turn are the further over time. at Silver. I questions Mr. There will

Joel Silver

for to update on our you I afternoon. forward look to continue Thanks. this progress. joining you us Thank

Operator

This concludes today's call. conference

disconnect. now may You

DAVIDsTEA (DTEAF) 19 Apr 182017 Q4 Earnings call transcript