Teavana third quarter net sales increase 35% to $33.4 million

Teavana Holdings, Inc. (NYSE: TEA) today announced financial results for the third quarter and fiscal year-to-date ended October 30, 2011.

Highlights for the third quarter:

• Net sales increased by 35% to $33.4 million from $24.7 million in the third quarter of fiscal 2010.
• The Company opened 17 new stores compared to 13 new stores opened in the third quarter of fiscal 2010. The Company ended the quarter with 196 company-owned stores.
• Comparable store sales, including e-commerce, increased by 8.5%. Comparable store sales, excluding e-commerce, increased by 6.0%.
• Income from operations increased by 26% to $1.6 million from $1.3 million in the third quarter of fiscal 2010.
• Net income increased to $0.9 million, or $0.02 per diluted share, from $0.3 million, or $0.01 per diluted share in the third quarter of fiscal 2010.

Andrew Mack, Chairman and CEO, stated: "We were very pleased with our third quarter results, which included strong sales in both our stores and our e-commerce channel. In addition, the store opening team has again demonstrated its ability to execute successfully, as evidenced by the 17 stores opened during the third quarter. We met our 2011 goal of 50 store openings a quarter ahead of plan, and more importantly, our new stores continue to perform in line with our expectations. With the year-to-date strength in sales and profitability, and the strong execution of the entire Teavana team, we are well-positioned to deliver on our sales and earnings goals as we head into the all-important holiday season."

Highlights for fiscal year-to-date:

• Net sales increased by 36% to $99.7 million from $73.5 million in the comparable period in fiscal 2010.
• The Company opened 50 new stores compared to 33 new stores opened in the comparable period in fiscal 2010. The Company has opened 55 new stores in the trailing four fiscal quarters.
• Comparable store sales, including e-commerce, increased by 8.7%. Comparable store sales, excluding e-commerce, increased by 6.2%.
• Income from operations increased by 50% to $10.4 million from $6.9 million in the comparable period in fiscal 2010.
• Net income increased by 86% to $5.3 million, or $0.14 per diluted share, from $2.9 million, or $0.08 per diluted share in the comparable period in fiscal 2010.

Balance sheet highlights as of October 30, 2011:

• Total debt: $4.5 million
• Total liquidity (cash plus availability on a $40 million revolver facility): $35.3 million

Outlook:

For fiscal 2011, net sales are expected to be in the range of $162 million to $166 million based on opening 50 new stores and an increase in comparable store sales, including e-commerce, in the fourth quarter in the mid-single digit range. Net income is expected to be in the range of $16.5 million to $17.3 million, or $0.43 to $0.45 per diluted share based on 38.3 million shares compared to net income of $12.0 million, or $0.32 per diluted share based on 37.7 million shares in fiscal 2010.

For the fourth quarter of fiscal 2011, diluted shares outstanding are expected to be 39.1 million.