The Temple & Webster Group Ltd (ASX: TPW) share price is launching into the stratosphere this morning after releasing its full-year FY24 results.
Shares in the online retailer are up 25% to $11.88 in early morning trade. For context, the S&P/ASX 200 Index (ASX: XJO) is mostly flat at 7,810 points.
Temple & Webster share price jumps on growth
Here are the key figures from the company's FY24 result:
- Revenue up 26% to a record $498 million
- Active customers up 31% to a record 1.1 million
- Earnings before interest, taxes, depreciation, and amortisation (EBITDA) down 43% to $8.4 million
- Net profit after tax (NPAT) down 78% to $1.8 million
- Closing cash balance of $116 million with no debt
What else happened in FY24?
The financial year saw the online furniture and homewares retailer take a greater slice of the industry. As a result, Temple & Webster now holds a 2.4% market share, surging 31% from the prior year. CEO Mark Coulter explained this move, stating:
Despite significant cost-of-living pressures, Temple & Webster has once again bucked the trend with another great set of results for FY24. Revenue was up 26% year on year in a market that was down 4%.
According to today's release, 57% of all Temple & Webster orders are now made by repeat customers. Meanwhile, new customer orders increased year-on-year from 491,000 to 654,000 — a significant achievement considering the ongoing wallet-squeezing of interest rates.
However, the full-year result had some weak points. For example, revenue per active customer declined sequentially from $477 to $461. Furthermore, increases in advertising and wages (along with $4.7 million in one-off costs) bumped the company's EBITDA down 43%.
The company decided to use its strong balance sheet in FY24, announcing a buyback on 28 May. Up to $30 million worth of Temple & Webster shares will be repurchased. Yet, the share price has slipped ~5% since the announcement.
What did management say?
Temple & Webster's CEO Mark Coulter shared optimistic sentiment towards the company hitting its mid-term goals with the help of AI. Coulter said:
Our mid-term target is to reach $1 billion-plus annual sales and we are progressing well against our strategic goals, which includes developing leading AI/data capabilities in our category. Our internal AI team has developed a Generative AI ('Gen AI') 'solutions in a box', which is now powering a suite of tools from product recommendations to live chat interactions with customers.
Already, we have seen millions of dollars of cost base savings, and conversion rate improvements of >10% due to the AI initiatives at are live on site.
On this, the company's presentation noted a 30% reduction (as a portion of revenue) in customer service costs and merchant fees due to AI-derived efficiencies.
What's next for Temple & Webster?
The online retailer provided a glimpse into FY25 today. In an attached trading update, Temple & Webster recorded a 26% revenue increase year-on-year for 1 July to 11 August.
Approximately $1.8 million of Temple & Webster shares have been repurchased since 17 June. Coulter stated, "Our $30 million on-market buyback will continue to improve shareholder returns in the absence of more accretive opportunities."
Elsewhere, the company has appointed Cameron Barnsley as its new chief financial officer.
Temple & Webster share price recap
The Temple & Webster share price is up 39.5% over the past year, outstripping the 20.6% rally across the consumer discretionary sector.
After today's rally, the company's shares are only 11% away from their 52-week high.
