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Temple & Webster vs Nick Scali shares: Furniture retail head-to-head
If you're tossing up between Temple & Webster Group Ltd (ASX: TPW) and Nick Scali Ltd (ASX: NCK) shares, you're not alone. Both companies are leaders in the Australian furniture retail space, but take very different approaches. With digital disruption shaking up the industry, one is an online-only growth play, while the other is a well-established, dividends-paying bricks-and-mortar business with growing international reach. Here's how they stack up against each other.
The case for Temple & Webster Group
Temple & Webster is Australia's largest pure-play online furniture and homewares retailer. Launched in 2011, it quickly carved a niche for itself, now offering an enormous range of over 200,000 products aimed at furnishing and decorating Australian homes and offices. Its model skips physical showrooms entirely, keeping costs low and focusing on customer convenience.
Several key metrics define Temple & Webster's investment case:
- P/E Ratio: 127.09 – It's priced for growth, which signals high expectations for future earnings but also brings risk if growth lags.
- Dividend Yield: 0.00% – Temple & Webster doesn't pay dividends, choosing to funnel any profits back into expanding the business.
- Year To Date Return: -67.8% – The shares have had a very tough run lately, down substantially this year.
Temple & Webster has more than a million Australian subscribers and incorporates private label brand Milan Direct. However, as a pure-play online retailer, it's heavily exposed to changing consumer sentiment and digital competition.
The case for Nick Scali
Nick Scali is a long-established name in the Australian furniture scene. Founded in 1962, it operates a sprawling network of Nick Scali and Plush stores across Australia and New Zealand, and is now setting sights on the UK with recent acquisitions and store rebranding. The business is known for its sofas but also covers most household furniture.
Notable fundamentals for Nick Scali:
- P/E Ratio: 16.11 – Far lower than Temple & Webster's, reflecting more stable, mature earnings.
- Dividend Yield: 5.05% (fully franked) – A strong, fully franked income stream, with a history of consistent dividend payments.
- Year To Date Return: -37.8% – The shares have also dropped sharply this year, but less so than Temple & Webster.
Nick Scali's model combines physical presence with growing e-commerce. It's a reliable cash-generating business, as shown by a dividend per share of $0.78 and a long history of fully franked payouts.
Valuation comparison
Here's how the major numbers stack up:
| Temple & Webster | Nick Scali | |
|---|---|---|
| Market Cap | $511.64 million | $1.23 billion |
| P/E Ratio | 127.09 | 16.11 |
| Earnings per share | 0.064 | 0.885 |
| Dividend Yield | 0.00% | 5.05% (100% franked) |
| Dividend per share | N/A | $0.78 |
Nick Scali stands out for value-conscious investors, with a much lower P/E and a high, franked yield, reflecting its consistent profit and mature business model. Temple & Webster's extremely high P/E signals a business the market expects to grow rapidly – although such multiples can unravel quickly if those expectations aren't met.
Note: Temple & Webster's reported P/E ratio may be based on a different earnings measure (e.g. underlying or forward earnings) than the EPS figure shown, which is why they may appear inconsistent.
Recent share price performance
Comparing recent share price trends until 23 September 2026:
- Temple & Webster: Closed at $4.41 on 23 Sep 2026, gaining 4.8% that day but still suffering a year-to-date return of -67.8%.
- Nick Scali: Closed at $14.40 on 23 Sep 2026, rising 1.0% that day with a year-to-date return of -37.8%.
Both companies have been hit hard in 2026, but Temple & Webster shares have fallen almost twice as much as Nick Scali's.
Which is the better buy?
For my money, I'd lean toward Nick Scali as the better buy right now. The reasons? First, Nick Scali offers a much lower P/E ratio and a high, franked dividend yield of over 5%, so you're getting paid to wait even if the business hits some bumps. While both shares are deep in the red year to date, Temple & Webster's steeper fall and nosebleed valuation multiple set a higher bar for recovery. Of course, if you have a high-risk tolerance and believe in the long-term potential of online retail, you might prefer Temple & Webster's growth option. But personally, I prefer Nick Scali's steadier earnings, dividends, and international expansion story at today's price.
