DAVIDsTEA (DTEA) Q2 2026 Earnings Report

The call was broadly positive. Management reported stronger brick-and-mortar and Canadian sales, a substantial gross-margin expansion to a record 61.9%, improved EBITDA and adjusted EBITDA, a narrower net loss, completed operational consolidation, and progress toward its store-expansion objectives. The main challenges were the 15.2% decline in U.S. sales caused primarily by trade tensions and tariff-related cross-border pressure, an 8.8% wholesale decline tied to replenishment timing, and lower cash and working capital compared with fiscal 2025 year-end.

DAVIDsTEA plans to reopen stores at Southgate Center in Edmonton and Metropolis at Metrotown in Burnaby, British Columbia this fall, bringing the total number of new stores since it launched this growth program to five, four of them in fiscal 2026, and positioning it to grow its footprint to 25 locations by year-end; for 2027, its initial assessment suggests a store expansion similar to 2026, with the pace determined by market conditions and its capacity to fund that growth. Each new location requires an investment of approximately CAD 450,000, with a payback period that ranges between 15 and 18 months; the company expects a positive spillover effect on its online and wholesale channels, expects U.S. fulfillment to reduce cross-border friction and support improved U.S. sales for the balance of the fiscal year, and expects to realize the full run rate benefit of a consolidated footprint beginning in the third quarter.