Temple & Webster shares rocket after better-than-expected FY results
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More news: Shares in Temple & Webster have surged nearly 27% to $12.04 after the online furniture retailer reported a lower-than-expected fall in profit and lifted margins after delivering record sales for the year.
Revenue surged 25.9% to $497.8 million and the company lifted its earnings margin to 2.6%, near the top end of its full-year guidance.
Jarden analysts, who have a 'buy' rating on the stock, said the company delivered "a strong result", with its trading update well ahead of web traffic, which "should encourage investors to focus on the long-term opportunity".
RBC Capital Markets analysts, who have an 'outperform' recommendation and a $13 price target on the stock, said the company delivered a resounding EBITDA beat with margins at the top end of guidance, after its mid-May trading update raised concerns over margins.
Temple & Webster FY profit slumps despite record sales
The news: Temple & Webster has delivered record annual sales but net profit slumped as the online furniture retailer reinvested in the business.
The numbers: Net profit for the year to June 2024 dropped 78.5% to $1.79 million, ahead of analyst expectations of $1.3 million.
Revenue surged 25.9% to $497.8 million. The company lifted its EBITDA (earnings before interest, tax, depreciation and amortisation) margin to 2.6%, near the top end of its full-year guidance of 1% to 3%.
It did not declare any dividend.
The context: The company's CEO Mark Coulter said Temple & Webster bucked the trend with a "great set of results" despite significant cost-of-living pressures.
The company said its lower profit reflected the group’s stated reinvestment strategy for FY24 to accelerate growth and capture additional market share. Profit before tax, which included one-off costs of $13.1 million, was down 47% to $6.36 million.
The online retailer, which has recently pushed into the hardware and home improvement segments, said it was on track for more than $1 billion in annual sales in the mid-term.
What they said: “Revenue was up 26% year on year in a market that was down around 4% which shows the strength in our product offering and the value we offer,” he said.
The sources: ASX announcement, Jarden research, RBC Capital research
