BMO Capital Cuts Price Target on DAVIDsTEA Inc. (DTEA) Following 4Q and Weak Guidance

BMO Capital maintained a Market Perform rating on DAVIDsTEA (NASDAQ: DTEA), and cut the price target to $13.00 (from $14.00), following the company's 4Q earnings report. The company reported adjusted EPS of $0.45, coming in ahead of consensus' estimate of $0.43. management released EPS guidance of $0.50-0.54, below prior $0.66 forecast due to expense pressure, as well as ongoing FX pressure on COGS.

Analyst Kelly Bania commented, "DTEA reported F4Q16/4Q15 adjusted EPS of $0.45 vs our estimate and consensus of $0.43. Comps of 6.6% were above our 6% forecast (driven entirelyby ticket with slightly negative transactions). Upside was driven by strong totalsales growth (+23% vs our +16% forecast) partially offset by a weakeroperating margin of 21.3% (vs forecast of 21.9%). F2017/2016 EPS guidance of C$0.50-0.54 was below our prior C$0.66 forecast due to expense pressure, continued FX headwinds and slightly weaker comp guidance of +MSD%."

For an analyst ratings summary and ratings history on DAVIDsTEA click here. For more ratings news on DAVIDsTEA click here.

Shares of DAVIDsTEA closed at $11.85 yesterday.

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