Consumer spending may be under pressure from the cost of living crisis, but not all retailers are struggling.
In fact, one ASX 300 stock has released a trading update this week and reported very strong revenue growth in FY 2025.
The stock in question is online furniture and homewares retailer Temple & Webster Group Ltd (ASX: TPW), which is up 125% since this time last year.
What did the ASX 300 stock announce?
Ahead of its annual general meeting, Temple & Webster released an update on its performance in FY 2025 through to 24 October.
According to the release, the online retailer has continued to deliver significant market share gains in a difficult consumer environment. As a result, the ASX 300 stock's revenue was up 21% for 1 July to 24 October compared to the prior corresponding period.
Management also revealed that it is experiencing good momentum in leading indicators. This includes average order values returning to growth and ~60% of orders now from repeat customers. Another positive was that Temple & Webster's margin levels continue to track in line with its target range. This is despite some increases in international freight rates during FY 2025.
At the end of the period, the ASX All Ords stock had a strong balance sheet position with over $100 million in cash and no debt.
Outlook
Management advised that it expects the November and Black Friday sale period to keep increasing in importance in the retail calendar, especially for online shopping. The good news is that it appears confident that this sales period will be strong for the company. The ASX 300 stock's CEO, Mark Coulter, said:
As I mentioned earlier, the media mix modelling analysis provided promising results, giving us confidence to continue our brand investment into FY25, including a cross-channel campaign over the November, December and Black Friday sales period.
Looking further ahead, the company advised that it remains on track to achieve its medium-term target of $1 billion in annual revenue within 3 to 5 years (from FY 2023). It has also reaffirmed its EBITDA margin guidance for FY 2025 of 1% to 3%.
Should you invest?
In response to the update, the team at Macquarie has reaffirmed its outperform rating and lifted its price target to $13.55 (from $12.90).
Elsewhere, Morgan Stanley has retained its overweight rating and $13.15 price target and Citi holds firm with its buy rating and $13.50 price target.
This could means there's still upside left in the tank for this high-flying ASX 300 stock.
