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Temple & Webster (ASX:TPW) share price rises after strong HY24 result

The Temple & Webster Group Ltd (ASX:TPW) share price is rising after the ASX retail share reported a very strong HY24 result.

The Temple & Webster Group Ltd (ASX: TPW) share price is rising after the ASX retail share reported a very strong HY24 result.

Temple & Webster sells a huge range of furniture and homewares through its website.

FY24 half-year result

Here are some of the highlights from the six months to 31 December 2023:

  • Revenue jumped 23% to $254 million
  • EBITDA of $7.5 million
  • EBITDA margin of 2.9%, at the top end of its guidance of 1% to 3%
  • Reached more than 1 million active customers in February 2024
  • Closing cash of $114 million, no debt

The company saw strong revenue growth despite “some of the toughest headwinds” to its category the company has seen.

Its revenue was driven by both first-time and repeat customers. Second quarter revenue rose 40% thanks to strong sales in the Black Friday to Cyber Monday period. The company is taking market share in a sector that is down around 6%.

The trade and commercial division saw 23% revenue growth to $23 million, equating to 9% of revenue. Home improvement saw 18% revenue growth to $14 million, which was a 6% contribution.

Temple & Webster revealed that it is adding hundreds of private label products to its website. It’s also increasing the amount of exclusive products to Temple & Webster from its own private label and exclusive drop-shipped products.

Temple & Webster achieved $7.5 million of EBITDA despite the costs of investing more in brand investment and marketing.

Is there a good outlook for the Temple & Webster share price?

Its goal is to achieve a ‘scale point’ as quickly as possible, while staying profitable. The company is still growing very quickly.

Temple & Webster revealed the second half of FY24 has “started strongly”, with revenue up 35% year on year for between 1 January to 11 February.

It is working hard to reach $1 billion of annual sales, which it thinks will give it a strategic moat around its range, brand awareness, data and AI capabilities, fixed costs as a percentage of revenue, and potentially new growth plays.

The company still has a long-term goal of becoming Australia’s largest retailer of furniture and homewares.

The Temple & Webster share price has risen a lot over the last few months, so I wouldn’t call it a buy right now. In the long-term I think it can reach its goals, but there could be some (volatility) bumps along the road and that could offer up a better price to buy.

While it’s difficult to be patient, I think it makes sense waiting with this one. There are other ASX growth shares that could be better buys today.

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Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, Jaz owns shares of Temple & Webster.
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