Temple and Webster shares tumble 8% amid bleak US consumer confidence

ASX retail shares are being punished today.

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Key points

  • ASX retail shares have softened on Wednesday amid weaker consumer data out of the US
  • Temple and Webster shares have given back gains from the previous week and are now trading well into the red
  • The company's share price has lost more than 70% over the last 12 months 

The Temple & Webster Group Ltd (ASX: TPW) share price has slipped around 8% into the red on Wednesday.

At the time of writing, the company’s shares are trading at $3.37 apiece, a shade above their 52-week closing low on 17 June. Earlier in the session, the share price hit an intraday low of $3.19, a fall of almost 13%.

Let’s see what’s going on with the online homewares and furniture retailer today.

What’s affecting Temple and Webster shares?

Investors have sold Temple and Webster shares down today on no news. However, economic data out of the US points to a softening economy and weaker consumer sentiment.

The US consumer confidence index fell to a 16-month low, as ongoing concern about high inflation has consumers worried about the prospect of a recession, Reuters reports.

Similarly, the US goods trade deficit fell 2.2% to $104 billion in May. During the month, exports increased 1.2% whilst imports dropped 10 basis points.

In addition, wholesale inventories rose by 2% as US retail shares climbed higher throughout May, Reuters notes.

The US consumer confidence index, in blue, is plotted alongside the Australia consumer confidence index on the chart below.

TradingView Chart

The weakness in US consumer sentiment seems to have spooked investors in ASX retail shares during Wednesday’s session.

The S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) has slipped almost 1% today.

Meanwhile, the S&P/ASX 300 Retailing Index is down 2%, paving the way for Temple and Webster shares to walk lower.

It was just last week when the company had spiked 11% into the green as investors went bottom fishing in the retail space in search of cheap shares with strong fundamentals.

Plus, the latest Australian retail data has shown we are still spending up, both online and in-store.

Retail trade rose 0.9% month on month and 10.4% year over year in May, according to Australian Bureau of Statistics (ABS) data.

Alas, Temple and Webster shares continue their downward descent today, extending losses to almost 70% over the last 12 months.

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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