Slides
Page 2
Cautionary Forward-Looking Statements Cautionary Forward-Looking Statements 2 This presentation includes statements that express our opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and there are, or may be deemed to be, “forward-looking statements” in this presentation. These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes”, “expects”, “may”, “will”, “should”, “approximately”, “intends”, “plans”, “estimates” or “anticipates” or, in each case, their negatives or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our multi-channel sales’ strategy including transition to e-commerce and wholesale sales, future sales through our brick-and-mortar, e-commerce and wholesale channels, our results of operations, financial condition, liquidity and prospects, including the impact of geopolitical tensions and the global macroeconomic environment. Forward-looking statements made in this presentation are based on a number of assumptions that the Company believed were reasonable on the day it made the forward-looking statements. Factors that could cause actual results to differ materially from the Company’s expectations expressed in or implied by the forward-looking statements include: 1) Our ability to successfully pivot our business towards evolving consumer preferences; 2) Our ability to maintain and enhance our brand awareness within an omni-channel strategy; 3) Our ability to attract and retain employees who are instrumental to growing a multi-channel business; 4) Our ability to grow our sales from our various channels; 5) Our ability to overcome changes in economic conditions, including a prolonged recessionary environment, or changes in the rate of inflation, employment rates or currency exchange rates; 6) Significant competition within our industry; 7) Our ability to obtain quality products from third-party manufacturers and suppliers on a timely basis, in sufficient quantities and at reasonable prices, especially in light of the continuing geopolitical tensions caused by acts of war and escalating aggression as well as an unfavorable economic environment caused by high interest rates and inflation; 8) Actual or attempted breaches of data security; and 9) The seasonality of our business. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. These statements are based upon information available to the Company as of the date of this presentation, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this presentation might not occur, and investors are cautioned not to unduly rely upon these statements. Forward-looking statements speak only as of the date of this presentation and we do not have any intention to update any forward-looking statements to reflect events or circumstances arising after the date of this presentation, whether as a result of new information, future events or otherwise. As a result of these risks and uncertainties, readers are cautioned not to place undue reliance on the forward-looking statements included in this presentation or that may be made elsewhere from time to time by, or on behalf of, us. All forward-looking statements attributable to us are expressly qualified by these cautionary statements. While we believe these opinions and expectations are based on reasonable assumptions, such forward-looking statements are inherently subject to risks, uncertainties, and assumptions about us, including the “Risk Factors and Uncertainties” detailed in our MD&A.
Page 3
Our Vision Our Vision Our Vision To become the world’s most innovative tea company, inspiring greater wellness and sustainability.
Page 4
Sarah Segal Chief Executive Officer & Chief Brand Officer Business Update Business Update 4
Page 5
Overvi ew– Q1 2026 Overview – Q2 2026 Overview – Q2 2026 › Results demonstrated resiliency of business model • Consolidated growth of 3.3% • Retail store growth of 9.6% • Comparable-store sales growth of 4.4% • Record high gross margin at 61.9% › 2 new locations in the Greater Toronto Area › Consolidation of our operating footprint in Montreal 5
Page 6
Retail Stores – Growth Engine in FY 2026 Retail Stores – Growth Engine in FY 2026 ›Fournewstores inFY 2026, raising countto25 › On track to have 25locations in 2026 • H2: Edmonton & Vancouver area › Proven store economics • Solid performance of recent new locations and 15–18 month payback › Significant white space in Canada to grow the footprint › Looking ahead to 2027, still in the planning phase, but initial assessment suggests a store expansion similar to 2026, depending on market conditions 6
Page 7
Frank Zitella President, Chief Financial and Operating Officer Financial Review Financial Review 7
Page 8
At a Glance – Q2 2026 At a Glance – Q2 2026 › Sales totaled $11.5 million • Compared to $11.1 million in Q2 2025 › Gross profit reached $7.1 million • 61.9% of sales versus 58.7% last year › SG&A as percentage of sales reduced to 59.8% • From 60.9% in prior year › Net loss narrowed to $1.2 million • Versus net loss of $1.6 million last year › Adjusted EBITDA grew to $0.5 million • Versus negative $0.2 million in Q2 2025 8
Page 9
Sales (in millions of CAD$) › Strong brick-and-mortar sales; modest growth in online; wholesale channel sales down in the quarter Comparable Same Store Sales 9 › Strong rebound from Q1 2026 Q2 2026 Results 0.6% -2.9% 15.8% -4.7% 4.4% Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 11.1 12.6 23.5 13.0 11.5 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 3.3%
Page 10
10 Online Sales Q2 2026 Results – Channel Sales Brick-and-Mortar Wholesale 5.1 5.3 11.8 6.0 5.2 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 4.6 4.9 9.6 5.2 5.0 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 1.5 2.5 2.1 1.8 1.3 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 1.1% 9.6% (8.8%) (in millions of CAD$) (in millions of CAD$) (in millions of CAD$)
Page 11
Canada 11 10.0 11.2 20.8 11.7 10.5 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 5.5% (in millions of CAD$) Q2 2026 Results – Geographic Sales (in millions of CAD$) U.S. 1.2 1.5 2.7 1.4 1.0 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 (15.2%)
Page 12
6.8 6.5 8.5 6.3 6.9 60.9% 51.3% 36.2% 48.2% 59.8% Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Gross Profit and Margin 12 6.5 7.2 13.9 7.8 7.1 58.7% 56.8% 58.9% 59.7% 61.9% Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 (in millions of CAD$) › Record high gross margin › Lower unitized freight and inbound shipping costs, combined with the continued benefit of the internalized fulfillment model. SG&A Expenses › Rise in Other SG&A expenses partially offset by lower professional fees › Lower SG&A as % reflects operating leverage on rebuilt cost structure (in millions of CAD$) Q2 2026 Results 9.0% 1.5%
Page 13
Net Income (Loss) 13 -1.6 -0.6 5.3 0.1 -1.2 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 (in millions of CAD$) 1 Please refer to the Appendix section of this presentation for a reconciliation of our “Non-IFRS Financial Measures and Ratios” to the most directly comparable measure calculated in accordance with IFRS. Q2 2026 Results Adjusted Net Income (Loss) 1 (in millions of CAD$) -1.8 -0.6 4.0 0.1 -1.0 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026
Page 14
Adjusted EBITDA1 14 -0.2 0.8 5.4 1.6 0.5 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 $0.7M (in millions of CAD$) Q2 2026 Results (in millions of CAD$) Adjusted EBITDAR1,2 -1.4 -0.4 4.2 0.43 -0.7 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 ($0.7M) 1 Refer to the Appendix section of this presentationfor a reconciliationof our “Non-IFRS Financial Measures and Ratios” to the most directly comparable measure calculated in accordancewith IFRS. 2 Defined as Adjusted EBITDA less rent equivalent expense.
Page 15
Cash Position 15 7.6 8.1 16.5 11.2 10.2 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 $2.6M (in millions of CAD$) Q2 2026 Results › Cash position improved YoY › Decline from Q4 2025 consistent with historical seasonal patterns of the business › $3 million private placement completed in Q4 2025 › YTD retail capital expenditure of $1.0 million
Page 16
5 On track to open 25 storesin 2026 Wrap-Up Wrap-Up 4 2 1 Leveraged benefits from leaner and more efficient cost structure Consolidation of operating footprint in Montreal Benefits starting in Q3 2026 Demonstrated resiliency of business model Adjusted EBITDA improved by $0.7 million 16 3 Exited quarter with strong cash and liquidity position
Page 17
Appendix 17 Appendix Appendix
Page 18
Non-IFRS Financial Measures and Ratios Non-IFRS Financial Measures and Ratios Reconciliationof Net Loss to EBITDA Reconciliationof EBITDA to EBITDAR 1Pleasereferto “Non-IFRSFinancial MeasuresandRatios”in the Company’sMD&A forthe three and six months ended August 1 , 2026and August 2,2025whichisavailable in the Investor Relations sectionofour website at www.davidstea.comandon the SEDAR+ website at www.sedarplus.ca.17 % Change % Change EBITDA (1) $ 247 $ (239) $ 486 203.3% $ 1,745 $ 899 $ 846 94.1% Interes t on leas e liabilities (214) (209) (5) (2.4)% (388) (426) 38 8.9% Am ortization of right-of-use assets (985) (1,006) 21 2.1% (2,008) (2,012) 4 0.2% EBITDAR(1) $ (952) $ (1,454) $ 502 34.5% $ (651) $ (1,539) $ 888 57.7% EBITDAR (1) as a % of Sales (8.3)% (13.0)% (2.7)% (6.2)% For the three-months ended August 1, August 2, 2026 2025 $ Change For the six-months ended August 1, August 2, $ Change2026 2025 % Change % Change Net loss $ (1,222) $ (1,562) $ 340 21.8% $ (1,161) $ (1,728) $ 567 32.8% Interes t on leas e liabilities 214 209 5 2.4% 388 426 (38) (8.9)% Interest on revenue-linked advances 33 — 33 NM 87 — 87 NM Finance income (43) (55) 12 21.8% (118) (135) 17 12.6% Depreciation of property and equipm ent 277 163 114 69.9% 535 324 211 65.1% Am ortization of intangible assets 3 — 3 NM 6 — 6 NM Am ortization of right-of-use assets 985 1,006 (21) (2.1)% 2,008 2,012 (4) (0.2)% EBITDA (1) $ 247 $ (239) $ 486 203.3% $ 1,745 $ 899 $ 846 94.1% EBITDA (1) as a percentage of Sales 2.1% (2.1)% 7.1% 3.6% For the three-months ended August 1, August 2, 2026 2025 $ Change For the six-months ended August 1, August 2, 2026 2025 $ Change
Page 19
Reconciliationof EBITDA to AdjustedEBITDA Non-IFRSFinancialMeasuresandRatios Non-IFRS Financial Measures and Ratios Non-IFRS Financial Measures and Ratios (a) Representsnon-cash stock-basedcompensationexpense.(b) Representsexecutiveand employee separationcosts resultingfrom management’scostcontainmentactions.(c) Representscosts incurredfor the warehouseconsolidationof the productionand assemblyfacilities (d) Representscosts incurredin the implementationand configurationof new software.(e) Represents reversal of previously recognized IT and other expenses. NM is abbreviationfor Not Meaningful. Reconciliationof Adjusted EBITDA to AdjustedEBITDAR 1Pleasereferto “Non-IFRSFinancial MeasuresandRatios”in the Company’sMD&A forthe three and six months ended August 1 , 2026and August 2,2025whichisavailable in the Investor Relations sectionofour website at www.davidstea.comandon the SEDAR+ website at www.sedarplus.ca. % Change % Change Adjusted EBITDA (1) $ 515 $ (211) $ 726 344.1% $ 2,137 $ 1,365 $ 772 56.6% Interes t on leas e liabilities (214) (209) (5) (2.4)% (388) (426) 38 8.9% Am ortization of right-of-use assets (985) (1,006) 21 2.1% (2,008) (2,012) 4 0.2% Adjusted EBITDAR(1) $ (684) $ (1,426) $ 742 52.0% $ (259) $ (1,073) $ 814 75.9% Adjusted EBITDAR (1) as a % of Sales (5.9)% (12.8)% (1.1)% (4.3)% For the three-months ended August 1, August 2, 2026 2025 $ Change For the six-months ended August 1, August 2, $ Change2026 2025 % Change % Change EB ITDA(1) $ 247 $ (239) $ 486 203.3% $ 1,745 $ 899 $ 846 94.1% Adjustm ents to EBITDA: Stock-based compensation ex pense (a) 78 217 (139) (64.1)% 121 293 (172) (58.7)% Em ployee separation costs (b) — 55 (55) NM — 344 (344) NM Warehouse relocation (c) 181 — 181 NM 262 — 262 NM Software im plem entation (d) 9 — 9 NM 9 73 (64) (87.7)% Reversal of IT and other ex penses (e) — (244) 244 100.0% — (244) 244 100.0% Adjus ted EB ITDA(1) $ 515 $ (211) $ 726 344.1% $ 2,137 $ 1,365 $ 772 56.6% Adjus ted EB ITDA(1) as a % of Sales 4.5% (1.9)% 8.7% 5.5% 2026 2025 $ Change For the three-months ended August 1, August 2, For the six-months ended August 1, August 2, 2026 2025 $ Change
Page 20
Non-IFRSFinancialMeasuresandRatios Non-IFRS Financial Measures and Ratios Non-IFRS Financial Measures and Ratios Reconciliationof Loss to AdjustedNet Loss (a) Representsnon-cash stock-basedcompensationexpense.(b) Representsexecutiveand employee separationcosts resultingfrom management’scostcontainmentactions.(c) Representscosts incurredfor the warehouseconsolidationof the productionand assemblyfacilities (d) Representscosts incurredin the implementationand configurationof new software. NM is abbreviationfor Not Meaningful. 1Pleasereferto “Non-IFRSFinancial MeasuresandRatios”in the Company’sMD&A forthe three and six months ended August 1 , 2026and August 2, 2025whichisavailable in the Investor Relations sectionofour website at www.davidstea.comandon the SEDAR+ website at www.sedarplus.ca.18 % Change % Change Net loss $ (1,222) $ (1,562) $ 340 21.8% $ (1,161) $ (1,728) $ 567 32.8% Em ployee separation costs (b) — 55 (55) NM — 344 (344) NM Warehouse relocation (c) 181 — 181 NM 262 — 262 NM Software im plem entation (d) 9 — 9 NM 9 73 (64) (87.7)% Reversal of IT and other ex penses (e) — (244) 244 100.0% — (244) 244 100.0% Adjusted net loss (1) $ (1,032) $ (1,751) $ 719 41.1% $ (890) $ (1,555) $ 665 42.8% For the three-months ended For the year ended August 1, August 2, August 1, August 2, $ Change2026 2025 $ Change 2026 2025
Page 21
www. davidstea. com www.davidstea.com