Temple and Webster’s share price has slumped despite revealing a major jump in earnings off the back of customers switching to digital shopping during the coronavirus pandemic.
At midday, investors had rejected the company’s interim results, with stock in the online furniture retailer trading 5 per cent lower at around $10.42 per share.
Temple and Webster on Tuesday released its unaudited half-yearly results that revealed an earnings before tax, depreciation and amortisation (EBITDA) of $14.8m, a 556 per cent rise on the previous year’s EBITDA position of $2.3m.
Revenue for the six months ending December 31 was up 118 per cent year on the year to $161.6m.
Temple and Webster chief executive Mark Coulter said customers had adopted the company’s product offering, with COVID-19 accelerating online shopping trends.
“The advantages of being the online market leader are apparent as we continue to grow our market share,” Mr Coulter said.
“It is great to see our revenue growth translating into operating leverage and significant profit growth. This allows us to accelerate our investment into areas such as data, technology, private label and brand awareness to further differentiate our proposition.”
The company noted Australian consumers holding a greater proportion of discretionary income due to travel restrictions was also a proponent of the increased buying activity.
It also expects greater buying activity within residential property markets will support sales for household furniture and homewares.
“Our strategy of being a category specialist, with a clear customer offering built around the biggest and best range of furniture and homewares in the country, combined with the most inspirational content and services and a great delivery experience and customer service, is working,” Mr Coulter said.
At the end of the reporting period, the company had a cash balance of $85.7m. It also recorded its first retail trading day where $3m of revenue was generated.