Temple & Webster shares punished as January sales decline

Shares in Millennials-focused furniture seller Temple & Webster have plummeted by 20 per cent on Tuesday morning after the company revealed a sales drop in January and a decline in active customers for the six months to December.

The company’s chief executive, Mark Coulter, told investors when announcing the company’s half-year results on Tuesday that even in a challenging market, the business still had long-term growth opportunities because of the longer-term move to online retail.

The business reported a net profit after tax of $3.8 million for the six months to December, a drop of 46.7 per cent on the same time in 2022, where sales were strong due to the continued COVID-driven online rush.

The company confirmed in a trading update for the first five weeks of this calendar year that sales were down 7 per cent, though sales in December were slightly ahead of the previous year.

Coulter was keen to highlight that the longer-term growth opportunities for the business remained intact.

“We believe our business model, customer metrics, brand and new growth horizons position us well to navigate any trading conditions and return to a high-growth business,” he said.

However, investors had been watching closely for signs of a consumer spending slowdown and reacted strongly to the trading update and the fact that Temple & Webster’s active customer numbers dropped by 11 per cent in the six months to December, from 940,000 to 840,000 during the half.

Shares were 20 per cent lower to $3.96 at 11.30am.