Coronavirus lockdowns suit Temple & Webster

Online-only homewares retailer Temple & Webster says second half revenue is up 74pc, as Australians stay at home.

Temple & Webster homewares.

Online homewares retailer Temple & Webster has witnessed a surge in demand as more customers choose to shop digitally during the coronavirus shutdown.

The company said working from home had prompted an initial sales increase in home office categories. However, demand is now shifting towards the core categories of furniture and homewares.

“April has seen a significant increase in demand, with record numbers of new and repeat customers. Second half revenue is up 74 per cent year-on-year,” the company said in a trading update on Tuesday.

Investors embraced the revenue hike. with shares increasing by 17 per cent to $4.01 in early trade, before closing up 8.2 per cent at $3.70 each.

Temple & Webster’s online-only business has benefited from the virus lockdown, as bricks and mortar competitors have had to close or restrict customer numbers.

“Being an online-only business, we can scale quickly and are responding to the increased demand by expanding our customer service team,” Temple & Webster chief executive Mark Coulter said.

In its interim results released in February, the company revealed a 50 per cent jump in revenue compared to the previous financial year, saying it was capitalising on younger buyers preferring to shop online.

Despite flagging growing consumption trends over the current month, the group noted it remains “watchful” of continued uncertainty in the economy.

Temple & Webster has prioritised shorter-term projects to support its market growth, which it says will help boost its operating leverage online.

Mr Coulter said the company remains committed to its longer-term goal of expanding market share in the online homewares sector.

“While the current global situation makes it hard to predict what will happen in the short term, we remain bullish about the longer-term shift from offline to online driven by changing customer preferences and demographics,” Mr Coulter said.

In its trading update, the company noted it remains in a strong financial position, with a debt-free balance sheet and a cash position of $20m.

“The group is profitable and cash flow positive, has a capital light business model and a debt-free balance sheet with a current cash level of around $20m,” the company said.

The company is closely monitoring overseas supply chains from Malaysia and India, but stock delays from China were now resolved.