Teavana Reports $43 Million in 2QTR Sales

ATLANTA, Ga.

Second quarter sales at Teavana grew 38% to $43.1 million at 284 locations.

Teavana has opened or acquired 105 stores in the past year.

“Earnings per share excluding Teaopia were at the top end of our guidance range,” said Andrew Mack, Chairman and CEO. The company now projects between $222 and $231 million in sales for the year.

“We were also very excited to have closed our acquisition of Teaopia, completed our search for our first VP of Marketing and opened our first store in Manhattan, which is performing extremely well,” Mack told investors.

“Our integration of Teaopia is well underway with numerous stores already converted to Teavana and performing ahead of expectations. Our new stores this year continue to perform above plan, and we’ve already opened 38 of the expected 60 new stores for this year.

Teavana VP of Marketing John Aylward, a senior marketing strategist and former brand director, GAP Europe, began work Sept. 4.

Prior positions include Senior Manager, Marketing and Communications with Sony Electronics, Inc. from 2003 to 2005 and jobs at Bartle Bogle Hegarty (BBH) Advertising, St. Luke’s Advertising, and Grey Advertising, Inc.

 “We are extremely pleased to have John on board. Marketing is a largely untapped opportunity at Teavana and we look forward to developing our marketing capabilities to strengthen customer loyalty and attract new customers to the Teavana brand,” said Mack.

“John has significant experience leading marketing efforts with prominent retailers, as well as a strong brand management and advertising background, and we are excited to be building out our marketing function under his leadership.”

“This is a brand that is synonymous with high quality tea and artisanal tea wares, a unique and engaging store environment and an exceptionally high level of customer service,” said Aylward. “I believe there is significant potential to further strengthen the brand and existing customer relationships, as well as draw new customers to Teavana, and I look forward to working with the team to build strategic marketing, advertising and promotional programs in order to further drive sales and traffic.”

The company reported $2 million in net sales from 46 Teaopia stores acquired June 11. Net sales year-to-date increased by 32% to $87.4 million from $66.3 million in the prior year period.

Teaopia is expected to generate $14 million to $16 million in sales. Net income, including Teaopia, is expected to be in the range of $20.8 million to $21.8 million.

Store traffic is up 6.1% in the second quarter reversing a first quarter decline of .3%. Average ticket declined by 5.5% reflecting an emphasis on beverage sales over dry tea according to an analysis by Seeking Alpha.

Comparable sales increased by 3.5%. Comparable sales include e-commerce and exclude the acquired Teaopia stores.

Shares continue to trade well below last year’s IPO and are currently around $12.

Source:  Seeking Alpha, Teavana

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