On Tuesday Temple & Webster Group Ltd (ASX: TPW) share price charged as much as 9% higher to hit a 52-week high of $1.79.
The shares of the leading online retailer of furniture and homewares eventually closed the day 4.5% higher at $1.72.
Why did Temple & Webster's shares charge higher?
Investors were scrambling to get hold of Temple & Webster's shares on Tuesday after the release of its full year results.
In FY 2019 Temple & Webster delivered an impressive 41% increase in revenue to $101.6 million. This was driven by a 37% increase in active customers and the company's ability to navigate broader retail challenges.
Pleasingly, the company swung from an operating loss of $0.7 million in FY 2018 to EBITDA of $1.1 million in FY 2019.
A key driver of this swing to profitability was a notable increase in its contribution margin. This is the margin after all variable costs including advertising and customer service are taken into account. During the 12 months the company achieved a 15.9% contribution margin, compared to its target of >15%.
Temple & Webster's CEO, Mark Coulter, was pleased with the company's performance during FY 2019.
He said: "I am pleased to announce our first full year of profit off the back of record revenue growth. Our strategy of being a category specialist, with a clear customer offering built around the largest range of furniture and homewares in the country, combined with the most inspirational content and the best customer service is working. Despite broader retail challenges we continue to buck the trend with record active customer growth, and our first $1 million day in June."
Outlook looking positive.
According to the release, the company has had a positive start to the new financial year, with July revenue growth in line with FY 2019.
Management is aiming to build on this by continuing to strengthen its core offering and increasing its investment into future growth opportunities, while staying profitable.
These include launching a mobile app to capitalise on the continued growth of mobile shopping, continued range growth including private label, expanding the group's logistics capabilities, and investing further into its B2B Trade & Commercial division.
Mr Coulter explained: "Now is the time to reinvest, to take advantage of a once in generation structural shift towards online. This reinvestment strategy supports Temple & Webster's stated goal of becoming the first place Australians turn to when shopping for their homes and work spaces."
Elsewhere in the industry on Tuesday, the Adairs Ltd (ASX: ADH) share price rose 1% and the Redbubble Ltd (ASX: RBL) share price rocketed 45% higher following the release of the ecommerce company's full year results.
