Davids Tea raises annual sales targets on strong Q3 performance
Davids Tea raised annual projections after a successful third quarter that saw the Canadian tea retailer post solid sales growth despite widening losses. The company continued to expand at a quick pace buoyed by 18 store openings across the US and Canada during the quarter, posting $26.5 million in sales, which is 32% higher than the same quarter last year. In turn, annual sales estimates were revised slightly upwards to between $128 million and $130 million. However, company losses quadrupled to over $600,000 compared to the same period last year and gross margins narrowed to 49.6% from 52.4%. Same store sales, a key industry metric that looks at existing store sales and online activity, rose 6.3%, which is in line with previous quarters. The company's shares are trading slightly higher as a result.