Temple & Webster share price: where next after blowout FY21 results?

Temple & Webster (ASX: TPW) – the e-commerce focused furniture company – revealed a blowout set of annual results on Tuesday, 27 July, reporting record revenue, profit and customer growth figures.

Commenting broadly on the operating environment, Temple’s management said:

'While lockdowns during FY20 and FY21 have accelerated the underlying shift from offline to online, pleasingly we continue to see strong growth even when comparing against Covid impacted numbers.'

The stock was bid sharply higher in response to the FY21 release, hitting an intraday high of $13.33 per share (+14.8%), before drifting lower as the session wore on. TPW closed out the session at $12.47 per share, up 7.41%.

Unpacking the FY21 results

The company reported stellar growth across the board – revenue climbed 85%, earnings (EBITDA) more than doubled and customers continued to flock to the platform.

Looking first at those top-line results, Temple & Webster reported full-year revenues of $326.3 million, implying a year-on-year increase of 85%. This, said management, was 'driven by strong growth in new and repeat customers and average order values.'

In step with that revenue growth, the company saw its active customer base increase 62% in FY21, while revenue per active customer also rose, moving from $380 per customer (2020) to $426 per customer (2021), implying an increase of 12%.

More positively still, fixed costs – as a percentage of revenue – actually fell in fiscal 2021, dropping 2.1% year-on-year, to come in at 7.9%.

This all translated to strong growth on the bottom-line. Earnings (EBITDA) rose 141% to hit $20.5 million, while earnings (EBIT) came in at $18.9 million.

Elsewhere, the company has continued to quickly amass a pile of cash, with its cash balance standing at $97.5 million at the close of FY21.

TPW has no debt on its balance sheet.

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Outlook strong, buoyed by tailwinds

Looking ahead, management said that fiscal 2022 was already off to a strong start, with the company notching up year-on-year revenue growth of 39%, across 1 July to 24 July.

Beyond that, the company cited a number of tailwinds that remained and would likely continue to benefit the company, including ‘the increased adoption of online shopping, travel restriction boosting discretionary income, and 'strong housing market growth.'

Many of those trends have been supercharged by COVID-19.

Adding to those points, Temple’s management said:

'We will continue our reinvestment strategy, investing into growth areas of the business to grow our online market leadership position with the ultimate goal of becoming the largest retailer (online and offline) for furniture and homewares in our home market.'