DAVIDsTEA Inc. revenue decline accelerated to 7.7% in FY2020 vs. 5.0% a year earliner
06/15/2020 • About DAVIDsTEA Inc. (
$DTEA) • By InTwits
DAVIDsTEA Inc. reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- The company operates at negative EBITDA Margin: -3.7%
- DAVIDsTEA Inc. motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2016-FY2020 was 0.0% while average EBITDA Margin was -1.7% for the sames years
- DAVIDsTEA Inc. has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.1%. At the same time it's a lot of higher than industry average of 0.5%.
- CAPEX is quite volatile: $1m in FY2020, $4m in FY2019, $10m in FY2018, $21m in FY2017, $17m in FY2016
- The company has unprofitable business model: ROIC is -29.8%
- It operates with medium-size leverage: Net Debt/EBITDA is 0.5x while industry average is
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
DAVIDsTEA Inc.'s Revenue decreased on 7.7%. Revenue decline showed acceleration in FY20Q4 - it was 11.6% YoY. Revenue decline was accelerating on average at -9.5 pp per annum in the last 5 years. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 5.5 pp from -9.2% to -3.7% in FY2020. During FY2016-FY2020 EBITDA Margin bottomed in FY2019 at -9.2%.
Gross Margin increased on 9.2 pp from 46.1% to 55.3% in FY2020. During the last 5 years Gross Margin bottomed in FY2019 at 46.1%. SG&A as a % of Revenue increased on 9.8 pp from 59.1% to 68.9% in FY2020. SG&A as a % of Revenue stuck to a growing trend at 5.5 pp per annum in FY2016-FY2020.
Net Income margin showed almost no change in FY2020. During FY2016-FY2020 Net Income margin topped in FY2017 at -1.7% and was declining since that time.
Investments (CAPEX, working capital and M&A)
DAVIDsTEA Inc.'s CAPEX/Revenue was 0.53% in FY2020. CAPEX/Revenue decreased on 9.0 pp from 9.5% in FY2017 to 0.53% in FY2020. For the last three years the average CAPEX/Revenue was 2.2%. CAPEX as a % of Revenue followed a declining trend at -2.5 pp per annum in FY2016-FY2020.
Return on investment
The company operates at negative ROIC (-29.8%) and ROE (-68.7%). ROIC increased on 4.1 pp from -33.9% to -29.8% in FY2020. ROE dropped on 29.0 pp from -39.7% to -68.7% in FY2020. ROIC followed a declining trend at -12.5 pp per annum in the last 5 years. During FY2016-FY2020 ROE topped in FY2017 at -2.7% and was declining since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.5x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2020. Debt surged while cash jumped on 10.1%.
DAVIDsTEA Inc. has no short term refinancing risk: cash is higher than short term debt (282.0%).
Financial and operational results
FY ended 02/01/2020
DAVIDsTEA Inc. ($DTEA) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 180.7 | 216.0 | 224.0 | 212.8 | 196.5 | -7.7% |
| Gross Profit | 95.3 | 108.4 | 107.2 | 98.0 | 108.6 | 10.8% |
| SG&A | 80.1 | 114.8 | 131.9 | 125.7 | 135.3 | 7.6% |
| EBITDA | 21.7 | 2.5 | -14.8 | -19.5 | -7.3 | |
| Net Income | -131.4 | -3.7 | -28.5 | -33.5 | -31.2 | |
Balance Sheet
|
|---|
| Cash | 72.5 | 64.4 | 63.5 | 42.1 | 46.3 | 10.1% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 16.4 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 72.2 | |
Cash flow
|
|---|
| Capex | 16.9 | 20.5 | 9.6 | 3.9 | 1.0 | -73.5% |
Ratios
|
|---|
| Revenue growth | 27.4% | 19.5% | 3.7% | -5.0% | -7.7% | |
| EBITDA growth | 30.6% | -88.4% | -686.4% | 32.2% | -62.5% | |
|
|---|
| Gross Margin | 52.8% | 50.2% | 47.9% | 46.1% | 55.3% | 9.2% |
| EBITDA Margin | 12.0% | 1.2% | -6.6% | -9.2% | -3.7% | 5.5% |
| SG&A, % of revenue | 44.3% | 53.1% | 58.9% | 59.1% | 68.9% | 9.8% |
| Net Income Margin | -72.7% | -1.7% | -12.7% | -15.8% | -15.9% | -0.1% |
| CAPEX, % of revenue | 9.3% | 9.5% | 4.3% | 1.8% | 0.5% | -1.3% |
|
|---|
| ROIC | 18.2% | -5.1% | -22.9% | -33.9% | -29.8% | 4.1% |
| ROE | -181.7% | -2.7% | -24.3% | -39.7% | -68.7% | -29.0% |
| Net Debt/EBITDA | -3.3x | -25.6x | | | |
DAVIDsTEA Inc. ($DTEA) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 44 | 39 | 39 | 74 | | -3.3% | -2.5% | -9.5% | -11.6% |
| EBITDA | 3 | -5 | -5 | 5 | | 1,815.9% | - | - | 532.1% |
| Net Income | -3 | -11 | -11 | -6 | | - | - | - | - |
Balance Sheet
|
|---|
| Cash | 35 | 30 | 28 | 46 | | -34.1% | -25.0% | 49.9% | 10.1% |
| Short Term Debt | 16 | 16 | 16 | 16 | | - | - | - | - |
| Long Term Debt | 83 | 78 | 74 | 72 | | - | - | - | - |
Ratios
|
|---|
| Gross Margin | 59.5% | 55.7% | 54.1% | 53.1% | | 9.9% | 12.5% | 12.0% | 5.6% |
| EBITDA Margin | 7.1% | -12.3% | -11.5% | 7.0% | | 6.7% | 17.4% | 8.1% | 6.0% |
| Net Income Margin | -7.5% | -29.0% | -27.4% | -7.8% | | -4.9% | -4.1% | -6.7% | 8.2% |
Peers in Specialty Stores
Below we provide DAVIDsTEA Inc. benchmarking against other companies in Specialty Stores industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
