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Online furniture and homewares retailer Temple & Webster (ASX: TPW) has delivered its most profitable April on record, generating $2.5 million in EBITDA during the month after deliberately shifting its strategy from growth toward margins as consumer sentiment plunged to historic lows.
The company reveals today that the margin run-rates achieved in April would nearly double its FY27 EBITDA to about $40 million even in a low-growth scenario, signalling the profitability step-up is structural rather than seasonal.
However, the market took the growth forecasts badly, marking the shares down more than 14.6 per cent to $4.54 in the opening minutes of trading on the ASX this morning.
Temple & Webster has guided FY26 revenue of $665 million to $675 million, representing growth of 11 to 12 per cent on the prior corresponding period, while EBITDA guidance of $20 million to $22 million implies growth of 6 to 17 per cent.
The company notes the EBITDA range includes $3 million in start-up investment for its New Zealand expansion.
The result comes against a backdrop of sharply deteriorating consumer confidence, with the Westpac-Melbourne Institute Consumer Sentiment Index crashing 12.5 per cent to 80.1 in April.
This was the largest monthly decline since the onset of COVID, driven by spiking fuel prices and a further 25 basis point interest rate rise.
Temple & Webster CEO Mark Coulter says the company has responded to the weakening environment by repricing its entire catalogue, introducing a new promotional cadence, securing additional supplier support, restructuring its marketing spend and slowing fixed cost growth.
“We remain firmly focused on growing our market share and reaching $1 billion in revenue by FY28, and becoming a larger, more profitable business," says Coulter.
"However, right now, given the uncertainty in the Australian economy, we have prudently chosen to rebalance between profit and growth in our core business.
"These initiatives have led to a new profit record for the month of April by quite a long way, and a clear path to a doubling of EBITDA in FY27 to (about) $40 million, despite the economic headwinds.
"This shows the incredible agility of our business model and the speed of which we can adjust our levers in response to external changes.”
The margin pivot marks a notable gear change from the first half of FY26, when Temple & Webster reported revenue of $375.9 million - up 19.8 per cent on the prior corresponding period - and EBITDA of $13.5 million, or $14.9 million excluding the New Zealand investment.
Full-year revenue guidance of 11 to 12 per cent growth represents a deceleration from the 20 per cent pace achieved across the first half, suggesting second-half conditions tightened considerably before the margin actions took effect.
Temple & Webster heads into FY27 under new leadership as co-founder Coulter moves to the role of executive chair from 1 July and Susie Sugden, managing director at Genesis Capital, takes the helm.
The move will mark a return for Sugden to Temple & Webster after previously holding the roles of chief commercial officer and chief marketing officer between 2016 and 2020.
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