DavidsTea started its fiscal year by swinging to a small profit despite seeing sales plunge 28 per cent.
The beverage company says it earned $3.2 million or 12 cents per diluted share for the three months ended May 1.
That compares with a loss of $45.8 million or $1.76 per share a year earlier.
Excluding restructuring charges, federal COVID-19 subsidies and impairment charges, adjusted profits were $1.4 million or five cents per share, versus a loss of $6.7 million or 26 cents per share in the first quarter of 2020.
Sales were $23.2 million, down from $32.2 million. However, online and wholesale revenues grew 17.2 per cent to $19.9 million in the quarter while retail sales plunged 78 per cent to $3.3 million.
The insolvent retailer plans to distribute $18 million to creditors as it prepares to emerge from creditor protection a “radically different organization” with a digital-first strategy, said Sarah Segal, CEO and chief brand officer.
DavidsTea has been severely impacted by stock lockdowns and exited its entire retail network except 18 Canadian stores.