By Kristin Jones
Teavana Holdings Inc. (TEA) swung to a fiscal third-quarter loss
as the tea retailer reported higher expenses, partly related to its
acquisition of Teaopia stores earlier this year, masking revenue
growth.
Teavana specializes in loose-leaf teas, teapots and other
tea-related products, which it sells out of small boutique-style
stores that employ "teaologists" to sell to customers in
high-traffic locations, such as malls. Starbucks Corp. (SBUX)
agreed to buy the company last month in a roughly $620 million
all-cash deal, as the coffee giant continues to expand beyond its
core.
For the quarter ended Oct. 28, the company reported a loss of
$1.42 million, or four cents a share, compared with a year-ago
profit of $936,000, or two cents a share, a year earlier. The
latest period included a negative impact of four cents a share,
primarily related to Teavana's acquisition of Teaopia stores in
June.
Sales rose 38% to $46 million.
The company in September had expected a per-share loss of two
cents to three cents on sales of $42 million to $45 million.
Gross margin narrowed to 55.9% from 61.9%, as input costs jumped
59%.
Overhead costs grew 45% to $25.3 million.
Same-store sales edged up 0.4%.
The company opened 17 new stores, ending the period with 301
company-owned stores.
Shares closed Monday at $15.45 and were unchanged after hours.
The stock is down 18% so far this year.
Write to Kristin Jones at kristin.jones@dowjones.com
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