Temple & Webster reported a 20% revenue increase to $375.9 million for H1 FY26, driven by record active customers and exclusive product growth. However, profit before tax fell 25% to $9.4 million, impacted by investments in New Zealand and higher marketing spend.
- Revenue up 20% to $375.9 million in H1 FY26
- Profit before tax down 25% to $9.4 million
- EBITDA margin at 3.6%, or 4.0% excluding NZ start-up costs
- Record active customers at ~1.4 million, up 14%
- New Zealand market entry shows early positive results
Strong Top-Line Growth Amid Strategic Investments
Temple & Webster Group Ltd, Australia's leading online furniture and homewares retailer, posted a robust 20% increase in revenue to $375.9 million for the half-year ended 31 December 2025. This growth was underpinned by a record ~1.4 million active customers, a 14% rise from the prior corresponding period, and a steady revenue per active customer of $472. The company’s focus on exclusive products, which now represent nearly half of total sales, continues to resonate with consumers.
Profitability Pressured by Expansion and Marketing
Despite the revenue surge, Temple & Webster’s profit before tax declined by 25% to $9.4 million, with net profit after tax falling 36% to $5.8 million. The profit contraction reflects increased investment in marketing, up nearly 20%, and one-off costs related to the transition of its Melbourne warehouse. Additionally, the company’s strategic entry into the New Zealand market contributed $1.42 million in start-up expenses, impacting EBITDA margins.
EBITDA stood at $13.5 million, representing a margin of 3.6%, or 4.0% when excluding New Zealand start-up costs. This performance remains within the company’s FY26 guidance range of 3–5%, signalling disciplined cost management despite growth investments.
Strategic Priorities Driving Long-Term Ambitions
Temple & Webster is pursuing a clear strategy to surpass $1 billion in annual sales within three to five years. Key pillars include strengthening brand awareness, expanding exclusive product offerings, leveraging data and AI technologies, reducing fixed costs as a percentage of revenue, and growing adjacent markets such as home improvement and trade & commercial sectors.
The company reported encouraging progress on these fronts – exclusive products now account for 49% of revenue, up from 45% a year ago; AI-powered logistics improvements have enhanced shipping cost accuracy by over 10%; and home improvement revenue surged 47% to $30 million. The Trade & Commercial segment also grew 24% to $31 million, reflecting diversification beyond core retail.
New Zealand Expansion and Market Position
Temple & Webster’s recent launch in New Zealand has exceeded early expectations, tapping into a market with no established mid-market online competitor. This expansion aligns with the company’s asset-light, drop-ship model, which reduces inventory risk and supports faster delivery. The Group remains debt free with a strong cash position of $160.6 million and generated positive free cash flow of $22.9 million in the half-year.
No dividends were declared during the period, reflecting the company’s focus on reinvesting in growth initiatives. The share buy-back program continued, with 596,926 shares repurchased and cancelled, supporting shareholder value amid the strategic transition.
Bottom Line?
Temple & Webster’s growth story is intact, but investors will watch closely how New Zealand expansion and margin pressures play out in the coming quarters.
Questions in the middle?
- How quickly will the New Zealand operations contribute positively to profits?
- Can Temple & Webster improve gross margins while sustaining customer growth?
- What impact will AI and technology investments have on long-term cost efficiency?