Teavana Posts 3Q Loss On Deal Costs
ATLANTA (AP) — Teavana Holdings Inc., which is being acquired by Starbucks, posted a third-quarter loss as one-time costs for recent business deals outweighed stronger sales.
Starbucks Corp. announced in November that it is buying Teavana for $620 million with the hopes of doing for tea what it did for coffee. The company plans to expand Teavana's presence beyond its network of roughly 301 mall-based stores into a number of free-standing sites.
However, the one-time costs tied to the pending Starbucks transaction and its own recent acquisition of Teaopia stores weighed down Teavana's most recent quarter.
Atlanta-based Teavana reported after the market closed Monday that it had a net loss of $1.4 million, or 4 cents per share, for the quarter that ended Oct. 28. That is compared with net income of $936,000, or 2 cents per share, in the same quarter of the prior year.
The latest quarter includes expenses of 3 cents per share tied to the Teaopia deal and 1 cent per share from other one-time expenses, including costs related to the Starbucks deal.
Its total revenue increased nearly 38 percent to $46 million, helped by the 46 Teaopia stores that it acquired in June. Its revenue from stores open at least a year, considered a key indicator of financial performance as it strips away recently opened or closed sites, increased 0.4 percent. That includes its online business.
The results were slightly better than what Wall Street was expecting. Analysts were looking for a 1 cent-per-share loss for the quarter, excluding one-time items, with revenue of $44.7 million.
Teavana did not issue guidance, given its pending acquisition by Starbucks. Its shareholders will get $15.50 per share cash in the Starbucks deal, which is expected to close by the end of the year
"We have great respect for what Howard Schultz and his team have built at Starbucks and believe that with Starbucks we will be able to truly realize our global potential and fulfill our mission of bringing premium tea to millions of people across the world," Andrew Mack, chairman and CEO of Teavana said in a statement Monday.
Teavana's shares increased 1 cent to close regular trading at $15.45 and were unchanged in after-hours trading.