The Temple & Webster Group Ltd (ASX: TPW) share price is down 16% after announcing its FY26 result and a trading update for FY27.
Temple & Webster is one of the largest online retailers in Australia, selling a wide variety of homewares, furniture and home improvement.
FY26 result
Here are some of the highlights for the 12 months to 30 June 2026:
- Revenue rose 10.6% to $664.6 million
- ‘Delivered’ profit grew 5.5% to $201 million
- EBITDA (EBITDA explained) rose 16.6% to $21.9 million
- Underlying EBITDA increased 28% to $25.9 million
- Net profit fell 62% to $4.3 million
- Operating cash flow of $24 million
- Cash balance decreased 15% to $122.7 million
What drove these numbers?
There were a number of positives within the result, such as the increased market share in Australian furniture and homewares growing from 2.7% to 2.9%. The Australian home improvement market share has reached 0.3%.
It also said that active customers rose 5% year on year to around 1.3 million. Additionally, revenue per active customer climbing 8% to $494, thanks to an increase in average order values in the second half of FY26.
The company noted that repeat customers represented 62% of total orders, up from 59% in FY25. Sales of exclusive products represented 51% of total revenue, up from 45% in FY25.
Its operating leverage continues to come through, with fixed costs as a percentage of revenue declining from 10.6% in FY25 to 10.1% in FY26. The dollar cost of fixed costs declined in the second half compared to the first half.
Its home improvement segment continues to grow at a strong rate – it saw 39% revenue growth to $59 million, while trade and commercial revenue saw 16% growth to $56 million. These segments are becoming increasingly important to the business as they grow faster than the core homewares and furniture sales.
The company started shipping to New Zealand in October 2025 and has generated $3 million in revenue, with a similar average order value to Australia.
The statutory net profit largely declined due to a higher income tax bill and higher depreciation and amortisation costs.
Outlook for the Temple & Webster share price
The company gave a trading update for the period 1 July to 17 August 2026, which showed revenue declined 13% year on year. It noted it is cycling 28% growth at the start of FY26. But, the company said the contribution margin dollars are up 10% over the same period.
Despite difficult trading conditions, the company is targeting EBITDA of between $33 million to $40 million for FY27, an increase of approximately 50% to 80%. Management said this demonstrated the flexibility of its business model.
Temple & Webster then noted it has improving unit economics and continued balance sheet strength, so it’s well-positioned for growth and it wants to become the largest retailer in its category in Australia. It will tell the market at its upcoming AGM how it intends to return to double-digit revenue growth.
I think the Temple & Webster share price could be an undervalued buy at this stage, with retail currently going through a difficult period.
The fact the business has a growing proportion of exclusive products, high customer satisfaction and more repeating customers is a good sign, in my view. I think it’s one of the ASX growth shares to buy right now.
