Squish CEO Sarah Segal takes over from father as head of DavidsTea

The CEO of candy retailer Squish is taking over from her father as head of insolvent tea company DavidsTea.

Sarah Segal becomes chief executive of the Montreal-based company on Wednesday while chief financial officer Frank Zitella becomes president. DavidsTea co-founder Herschel Segal is stepping down as interim CEO but will remain board chairman.

The executive changes were announced Tuesday as the company reported its second-consecutive quarterly profit.

It earned $14.5 million or 54 cents per share in the third quarter, compared with a loss of $10.8 million or 42 cents per share a year earlier.

The adjusted profit was $2.3 billion or nine cents per share, versus an adjusted loss of $8.8 million or 34 cents per share in the third quarter of 2019.

Revenues for the three months ended Oct. 31 decreased 33.6% to $26.2 million, from $39.5 million.

"Our shift towards e-commerce and wholesale continues to progress above our expectations and our latest results clearly indicate that we are making good progress," said Sarah Segal, who had been a board member between 2012 and 2017 and CEO of Squish since 2013.

The return to profitability for DavidsTea follows its decision to close all but 18 stores in Canada, allowing it to save on salaries, benefits and store rent.

Its brick-and-mortar sales declined 87% to $4.1 million, while e-commerce and wholesale revenues increased 145.5% to $22.1 million.

DavidsTea's is restructuring while under creditor protection, which was extended until March 19.