Temple & Webster share price soars 21% on revenue lift

Investors are responding positively to the homeware retailer's results.

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Key points

  • The Temple & Webster share price is surging today 
  • The company delivered an EBITDA margin at the higher end of the company's guidance 
  • Revenue also lifted 31% on the previous financial year 

The Temple & Webster Group Ltd (ASX: TPW) share price is rocketing today amid the company's FY22 results.

The company's share price is currently trading at $5.31, a 20.68% gain. For perspective, the  S&P/ASX 200 Index (ASX: XJO) is up 0.9% at the time of writing.

Let's take a look at what Temple & Webster reported to the market.

Temple & Webster reports

Highlights of Temple & Webster's results presentation include:

  • Revenue lifted 31% on last year to $426.3 million
  • EBITDA margin of 3.8%, towards top end of guidance
  • EBITDA of $16.2 million
  • Net profit before tax of $13.2 million, down 31% on FY21
  • Cash balance of $101.1 million

The online furniture and homeware company's revenue growth was driven by higher customer numbers and more revenue per active customer.

The EBITDA margin of 3.8% was towards the top end of the 2-4% guidance provided for FY22.

The FY22 EBITDA, although down on FY21, equated to a compound annual growth rate (CAGR) of 38% on a two-year basis.

Active customers jumped 21% to 940,000, while revenue per active customer lifted 6%.

The company's trade and commercial division grew 39% compared to the previous financial year, while the home improvement category experienced 61% growth.

Management commentary

Commenting on the results, the chief executive officer Mark Coulter said:

Despite some significant domestic and global challenges, Temple & Webster has once again bucked the trend to deliver a great set of numbers.

Due to careful margin and cost base management, we were able to drive an EBITDA margin result at the top end of our 2-4% guidance, even in these challenging retail conditions, and after our investment into The Build.

We believe our flexible business model, our proposition around a great quality range at affordable prices, and our commitment to customer satisfaction and happiness will resonate even more strongly with customers during these tougher times

What's ahead

Temple & Webster is forecasting an EBITDA margin of between 3-5% in FY23. This is an upgrade on the FY22 guidance.

The company has fast-tracked some margin optimisation and cost management programs due to FY23 cyclical headwinds.

Temple & Webster is predicting a return to double-digit growth in FY23.

Temple and Webster's new headquarters in the inner-west of Sydney will be ready in the first half of FY23.

The company stressed "we remain committed to our profitable growth strategy", adding:

We're confident we have the people, platforms, brand and business model to achieve our goal of becoming Australia's largest retailer of furniture and homewares.

Temple & Webster share price snapshot

The Temple & Webster share price has fallen 56% in the past year, while it has lost nearly 50% year to date.

However, in the past month, Temple & Webster shares have jumped 57%.

For perspective, the ASX 200 index has lost nearly 6% in the past year.

Motley Fool contributor Monica O'Shea 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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