Temple & Webster Group’s Shares Fall on COVID-19 update
- Temple and Webster's shares opened 3.8 per cent lower on COVID-19 Update.
- Revenues rose 112 per cent in the third quarter of FY21.
- The company have reaffirmed their growth strategy for the coming years.
Shares in major Australian retailer Temple and Webster (ASX: TPW), have opened 3.8 per cent lower today following the release of a COVID-19 update to the ASX. The Macroeconomically driven shift towards online e-commerce has undoubtedly benefitted companies such as Temple and Webster though the company has no doubt underwhelmed investors. Though Temple and Webster shares might be under pressure in the short-term, the company has suggested that current trends represent a "permanent shift to online adoption.
The company is also "Australia's largest pure-play retailer in the furniture and homewares market", with a current market capitalization of 1.28 billion. Temple and Webster provide a wide variety of products including, home décor, furniture, lighting and much more. Founded in 2011, the company's strategic advantage is its focus on and perfection of online retailing, providing affordable consumer goods through easy and transparent mediums.
In the third quarter of FY21, Temple and Webster saw revenues surge 112 per cent against the prior corresponding period (pcp), with active customers surpassing 750,000 at the end of the same period. In April alone, revenues rose over 20%. Trends toward online e-commerce have been accelerated by the COVID-19 pandemic with more than 20 per cent of all furniture's and homewares purchased by consumers in the US, purchased online. The trend in Australia is also strong with 9 per cent of all furniture's and homewares being purchased online with a total of 46 per cent of Australian consumers now shopping online.
Shares in major competitor Kogan.com (ASX: KGN) also opened lower today as investors price in future growth expectations. After a precipitous fall from above $25, the company's shares have more recently consolidated above $13 per share.
As of the 20th of April 2020, Temple and Webster is trading at $10.61 per share, rallying 2.78 per cent within the first hour of trade. Currently, shares are trading 23 per cent lower than all-time highs set at $14 per share. Moving forward, Temple and Webster have reinstated their growth strategy in for the coming years. They will prioritize investing in mainstream media to encourage both first time and repeat customer while also using "tactical pricing and promotions to increase conversion."
Temple and Webster Chief Executive Officers have commented how "we are at the start of this once in a generation shift and now it the time to put our foot down to secure market leadership." To stay ahead of fast-moving trends, the company will also work with 3D and artificial intelligence to enhance user experiences.