The Temple & Webster Group Ltd (ASX: TPW) share price is on watch today after the online retailer delivered record full year results. Consumers spending more time at home have increased spending on homewares while the coronavirus pandemic has prompted a shift to online shopping. These twin trends have benefitted Temple & Webster, driving sales to record levels.
What does Temple & Webster do?
Temple & Webster is an online-only furniture and homewares retailer. Australia's largest e-commerce company in the furniture and homewares space, Temple & Webster sells more than 180,000 products from hundreds of suppliers. The company operates a drop-shipping model where products are sent directly to customers by suppliers. This reduces the need to hold inventory and complements a private label range sourced directly by Temple & Webster.
How did Temple & Webster perform in FY20?
Temple & Webster saw sales and revenue accelerate over the course of FY20. Full year revenue was $176.3 million, up 74% year on year. Second half revenue was up 96% on the prior corresponding period while Q4 revenue was up 130%. Active customers grew 77% year on year to reach 480,000 and the company had its first $2 million day in June. Full year EBITDA was $8.5 million, up from $1.5 million in FY19. This gave net profit after tax of $13.9 million, which included an income tax benefit of $5.9 million.
CEO Mark Coulter said:
Our strategy of being a category specialist, with a clear customer offering built around the biggest and best range of furniture and homewares in the country, combined with the most inspirational content and services and a great delivery experience and customer service, is working. The advantages of being the online market leader are apparent as we continue to grow our market share.
What is the outlook for Temple & Webster?
FY21 has started strongly for Temple & Webster, which reached the 500,000 customer milestone in July. Revenue grew 161% year on year to 27 August, with trade ~160% up in both July and August. EBITDA for July and August is estimated to be ~$6 million. The mobile app has been launched in the app store and the company's second national television campaign will start at the end of Q1. The company had cash of $81 million and no debt as at 27 August, thanks to a recent $40 million placement. This leaves it well funded to pursue its growth objectives.
The Temple & Webster share price was at $8.21 in close of trade on Friday.
