More upbeat news from retailing (see separate story on the merger announcement between two mid-ranked retail mall trusts) with emerging online furniture and homewares operator Temple & Webster again confirming that the Covid lockdown has been very good for business.
Shareholders on the virtual annual meeting call on Monday heard that the company has made a very strong start to the 2021-22 financial year, thanks to the Covid lockdowns in Sydney, Melbourne and parts of both states, as well as the ACT.
The company said in a release issued before the meeting that revenue for July 1 to 15 October was up 56% over the prior corresponding period and at the moment it looks as though the current first half of the year will be better than the second.
The company told the ASX in the update that it continues to expect its full year earnings before interest, tax, depreciation and amortisation (EBITDA) margin to be in the 2% to 4% range in FY 2022. Though, it anticipates that first half EBITDA margin will be higher than this level.
CEO Mark Coulter said in the release that the company is still benefiting from “strong tailwinds, including the ongoing adoption of online shopping due to structural and demographic shifts and an acceleration of these trends due to COVID-19.”
“A buoyant housing market and a reduction in travel spend are also supporting the growth of our sector, he added”.
“While the end of lockdowns will no doubt have the world return to a more “normal” distribution of discretionary spend, we would remind our shareholders that there is still significant growth ahead for Temple & Webster as we continue our march up the online adoption curve.
“Temple & Webster is a long-term growth story and periods of above and below average growth are to be expected,” he added.
Temple & Webster said it has been largely unaffected by supply chain problems seen elsewhere due to business model and the diversity of its supplier base.
Mr Coulter explained: “The inherent flexibility and diversity of Temple & Webster’s business model and supplier base is proving fruitful.”
“We source from over 100 factories through our private label division and our drop ship suppliers are sourcing from thousands of factories, meaning we can adapt to the changing supply chain environment quickly.”
“Our inventory weeks of cover levels for our best sellers (both drop shippers and private label) are at a similar position or better than this time last year. While we will no doubt see individual products move in and out of stock, we expect to see customers substitute into other similar products as we witnessed last year,” he added.
TPW shares fell 2.7% to $13.04 after the meeting.