ASX retail stock Temple & Webster Group Ltd (ASX: TPW) is getting hammered, plunging 17% to a new 52-week low of $4.18 on Wednesday.
The stock is down 70% in 2026 and 82% over 12 months, vastly underperforming the S&P/ASX 200 Index (ASX: XJO).
And yet, the online retailer just delivered record revenue and stronger profitability. So, what's going on?
Image source: Getty Images
Temple & Webster keeps growing
This $600 million ASX retail stock is one of Australia's leading online retailers, selling hundreds of thousands of homewares, furniture, and home improvement products.
And here's a key part of the model: most products are shipped directly from suppliers. That gives Temple & Webster a remarkably capital-light model for the sheer volume of products flowing through its platform.
Today's numbers show the business is still moving forward. Revenue climbed 10.6% to $664.6 million, while EBITDA rose 16.6% to $21.9 million. Strip out foreign exchange effects, and underlying EBITDA jumped an impressive 28% to $25.9 million.
Delivered margin improved 5.5% to $201 million, while the company ended FY26 with $122.7 million in cash after spending $30 million on share buybacks.
Customer metrics were encouraging, too. Market share increased to 2.9%, active customers rose 5% to about 1.3 million, and repeat customers generated 62% of all orders, up from 59%.
There are growth engines beyond the core business, too. Exclusive product lines and adjacent businesses are now generating more than $100 million in annual revenue. The New Zealand operation contributed $3 million since launching in October 2025, while home improvement revenue surged 39%.
Temple & Webster also generated $24 million in operating cash flow, while fixed costs fell as a percentage of revenue.
What did management say?
Executive Chair Mark Coulter said:
Despite a challenging environment, we have been able to deliver record annual revenue of $665 million, while materially improving the underlying profitability of the business through several margin optimisation initiatives. These initiatives, combined with the flexibility of our operating model, resulted in our Underlying EBITDA (excluding unrealised foreign exchange losses) increasing by 28% vs pcp to $26 million.
What's next for Temple & Webster?
Here's where things get interesting for the ASX retail stock. Temple & Webster is targeting FY27 EBITDA of $33 million to $40 million, implying roughly 50% to 80% growth from FY26.
Management wants to return to double-digit revenue growth by leaning harder into digital and AI innovation, strengthening its core online offering, and scaling home improvement and New Zealand.
New CEO Susie Sugden is also expected to outline the next phase of the strategy at the AGM and first-half results, with the company targeting further growth in Australia's $40 billion-plus homewares and furniture market.
Foolish takeaway
The market appears to be demanding faster growth from the ASX retail stock, despite the strong FY26 result.
That disconnect between solid execution and lofty expectations could be the key to understanding this brutal sell-off.
