The Temple & Webster Group Ltd (ASX: TPW) share price is charging higher this morning after the online furniture and homewares retailer revealed bumper sales growth during the COVID-19 lockdown.
At the time of writing, Temple & Webster shares have climbed 9.78% to $5.50 after rallying as much as 21.36% in early trade.
What did Temple & Webster announce?
The company revealed that it continues to trade strongly in the second half of FY20, with revenue growing at 90% compared to the prior corresponding period (pcp). This was driven by strong growth in April and May, which Temple & Webster attributed to behaviour shifts as consumers turned online to fulfil their furniture and homewares needs. The retailer noted that all major categories have experienced significant year-over-year growth.
This uplift in demand has led to an increase in operating leverage. While Temple & Webster reported year-to-date revenue of $151.7 million through to 31 May, up 68% on the pcp, EBITDA came in 668% higher over the same period at $7.1 million (albeit off a relatively low base).
Meanwhile, the company noted that active customers, which represents the number of unique customers who have transacted in the last 12 months, is up 68% to 440,257.
In today's release, the retailer highlighted its capital-light business model, debt-free balance sheet, and strong positioning to capitalise on the structural shift in the furniture and homewares market to online channels. As at 31 May, the company had $29.2 million of cash on its books.
What next?
Looking forward, Temple & Webster stated that strong trading has continued in June, with revenue growth tracking at more than 100% compared to the pcp.
Commenting on today's update, chief executive and co-founder Mark Coulter said:
"We can already see in our numbers that many of the customers who have never shopped with us before, and may be first time online shoppers in our category, have already returned and made repeat purchases. These customers are experiencing the benefits of our channel, including range, convenience and value."
Temple & Webster expects to report its full-year FY20 results at the end of July.
