Furniture company Temple & Webster Group Ltd (ASX: TPW) says it is delivering solid market share gains, with revenue up 18% for the year to date. However, its shares were smashed in early trade, selling down more than 30% on the open.
The company is due to hold its annual general meeting (AGM) on Thursday, with Chief Executive Officer Mark Coulter stating in a release to the ASX that revenue from July 1 to November 20 was up 18% compared to the previous corresponding period.
Mr Coulter added:
Key leading indicators and customer cohort performance are trending positively, with average order values up 3% vs the pcp, active customers at record levels, and the proportion of orders from repeat customers continuing to increase.
Mr Coulter said the home improvement business "continues to outperform", with growth tracking at 40% over the previous period, while trade and commercial was also doing well, with growth sitting at 23%.
He added:
In terms of outlook, our focus remains on delivering revenue growth within our target range for FY26 and we remain on track to achieve our mid-term goal of $1 billion in annual revenue. We reaffirm our EBITDA margin guidance of 3 – 5%, and with a cash position of over $150 million, our on-market share buy-back program is in place and ready to be deployed.
Growth not strong enough
While the growth numbers reported were strong in isolation, RBC Capital Markets said in a note to clients that consensus estimates were for even stronger growth of 23% across the whole of the company's first half.
As the broker said:
Temple & Webster's AGM update revealed top-line growth in 1H26-to-date tracking behind consensus expectations. The market may be disappointed by this update. With December typically a quieter month for (the company), and the business yet to cycle the key Black Friday/Cyber Monday sales period, we see potential risk for further deceleration over the remainder of the half.
Temple & Webster shares were pushed as low as $13.71 on Wednesday morning, down 32.9% from the previous close, before recovering to be 25.5% lower at $15.
RBC still has a price target of $26 on the stock, while analysts at Bell Potter recently upgraded the stock, although this was prior to the most recent trading update.
The Bell Potter team said they remained optimistic about the first half, given data from comparable retailer Mocka, which is part of competitor Adairs Group Ltd (ASX: ADH), as well as recent online spend data from Australia Post.
Bell Potter, at the time of writing their report in late October, had a price target of $28 on Temple & Webster shares.
