Temple & Webster earnings soar 141pc as home furnishings boom continues

The pandemic home improvement frenzy has eased but online retailer Temple & Webster is still posting double-digit sales growth.

Mark Coulter says a ‘healthy long-term growth rate is very achievable’ for Temple & Webster. Picture: Britta Campion

Online furniture retailer Temple & Webster has more than doubled its earnings in the 2021 fiscal year, driven by a record year for sales, profit and customers after the shutdown of travel and other activities directed surplus cash into home furnishings and customers towards online shopping.

Temple & Webster, whose shares have risen five-fold since the pandemic began as it led a vanguard of pure-play online retailers, released its unaudited results on Tuesday that underlined its growing market strength.

The company said full-year revenue rose 85 per cent to $326.3m as pre-tax earnings more than doubled, up 141 per cent to $20.5m, and active customers increasing 62 per cent to 778,000.

The figures further boosted the company’s share price, which rose 86c, or 7.4 per cent, to close at $12.47.

Temple & Webster had witnessed a moderating of its skyrocketing sales trajectory first encountered when the pandemic emerged in Australia last year, but its sales growth is still comfortably gaining at a double-digit clip. The retailer said that in the fourth quarter of 2021 it had maintained its strong sales growth, which rose 26 per cent year on year, but this was against the fourth quarter of 2020, when a rush by shoppers to fill their homes with couches, tables and cushions saw sales increase by 130 per cent.

There was also a one-off cost of $2.9m in the second half due to supply-chain constraints and shipping-related issues.

In a trading outlook provided along with its unaudited 2021 results, the company said sales growth between July 1 and July 24 was 39 per cent.

Chief executive Mark Coulter said Temple & Webster had once again delivered a record result.

“While lockdowns during fiscal 2020 and fiscal 2021 have accelerated the underlying shift from offline to online, pleasingly we continue to see strong growth even when comparing against Covid-impacted numbers,” Mr Coulter said.

“While the start of fiscal 2022 has been difficult for many Australians, we remain focused on delivering a great experience for our customers, built around the biggest and best range of furniture and homewares, combined with inspirational content and services and a great delivery experience and customer service.”

Mr Coulter said that although its sales growth had slowed into 2021 against 2020, the online retailer was still on target for a revenue run rate at about 40 per cent compound annual growth amid the pandemic.

“I think what we have always pointed to is compound annual growth pre-Covid of around 40 per cent and coming into Covid we had some periods of 30 per cent and some of 50 per cent,” he said. “Our business as the market leader in a segment like ours with lots of underlying growth and structural trends in its favour, we think a healthy long-term growth rate is very achievable.”

Mr Coulter said he was supportive of government stimulus packages, such as JobKeeper, to help keep the retail sector afloat and secure jobs as the economy was dragged down by lockdowns.

“I think one of the most important roles of government is to help out the population in times of need, so I think there are a lot of Australians who are in a time of need and it is the role of government to provide that help when needed,” he said. “We are definitely in favour of any schemes which can help Australia get by.”

Temple & Webster said it would continue to reinvest in the business and invest in growth areas to reach its goal of becoming the largest retailer – online and offline – for furniture and homewares.

There were no plans as yet to pay a dividend.