The Temple & Webster Group Ltd (ASX: TPW) share price has jumped 24% after the online retailer reported its FY24 result.
Temple & Webster is Australia’s largest online retailer of furniture and homewares.
Temple & Webster FY24 result
Here are some of the main numbers from the FY24 report for the 12 months to 30 June 2024:
- Revenue soared 26% to $498 million
- Active customers rose 31% to 1.1 million
- EBITDA of $13.1 million
- Free cash flow generated of positive $25 million
- Closing cash balance of $116 million and no debt
The company achieved this result despite the market being down around 4%, so the business continues to grow its market share.
Repeat customers are now making up 57% of all orders. The company highlighted more than 850 new private label products were added during FY24, including home improvement.
Its segment serving business/commercial customers saw 27% revenue growth, while the home improvement division delivered 26% revenue growth.
Temple & Webster is targeting at least $1 billion of annual sales within the next few years, and it’s “progressing well” towards its strategic goals, which includes developing AI/data capabilities in its category.
Its AI team has created a suite of tools from product recommendations to live chats with customers. The business has already seen “millions of dollars of cost base savings” and a conversion rate improvement of more than 10% due to the AI initiatives that are live on site.
Management commentary
The Temple & Webster CEO Mark Coulter said:
We continue to execute on our ambition of growing market share and establishing Temple & Webster as the go to brand for the next generation of home shopper. At our mid-term target of $1b+ in annual sales, we believe our strategic moats around range, being a top-of-mind brand, data & AI capabilities, low fixed costs and new growth plays will be firmly entrenched.
Our $30m on-market buyback will continue to improve shareholder returns in the absence of more accretive opportunities, with ~200k shares bought back at a total cost of ~$1.8m since the 17th of June 2024.
We are well funded to execute on our strategy with $116m of cash and no debt and remain committed to our goal of becoming Australia’s largest retailer of furniture and homewares.
Final thoughts on the Temple & Webster share price
The company certainly isn’t as cheap as it was yesterday, so I wouldn’t call it a good buy today. FY25 has started strongly, with revenue to 11 August 2024 up 26% year on year.
Temple & Webster is expecting its sales and profit margins in the coming years, which should help significant growth of the net profit and perhaps the Temple & Webster share price.
I’m a shareholder, but I bought at a much lower price than today. I’m waiting for a better price before buying more, but I do believe the company’s market capitalisation can grow significantly by the end of the decade, so it could be a good long-term investment today, but I’d expect a lot of volatility.
For now, there are other ASX growth shares I’d invest in first.
