Temple & Webster Eyes Up to 80% EBITDA Surge After Record FY26 Revenue

Record Revenue Amid Challenging Conditions

Temple & Webster (ASX:TPW) has delivered a standout FY26 performance, posting record revenue of A$665 million, an 11% increase over the previous year despite a challenging consumer environment. The online furniture and homewares retailer demonstrated resilience, with active customers growing 5% to approximately 1.3 million and repeat orders rising to 62%, up from 59% in FY25.

Underlying EBITDA (excluding foreign exchange losses and one-off costs) surged 28% to A$25.9 million, reflecting margin optimisation initiatives and operational efficiencies. The company’s EBITDA margin improved by 53 basis points to 3.9%, signalling better unit economics even as delivered margins slightly contracted due to higher price and promotion costs in Q3.

Exclusive Products and Adjacent Markets Drive Growth

Temple & Webster’s strategy to focus on exclusive product lines and adjacent business segments is paying off. Exclusive products now represent 51% of total revenue, up from 45% in FY25, with over 1,100 new private label options launched across key furniture categories. Growth adjacencies; including home improvement, trade & commercial, and the New Zealand market; contributed over A$100 million in annual revenue, a 30% increase year-on-year.

Home improvement sales jumped 39% to A$59 million, while trade & commercial revenue increased 16% to A$56 million. The New Zealand operation, launched in October 2025, generated A$3 million in revenue from more than 7,400 orders and reached contribution margin break-even ahead of initial expectations, underscoring the potential of international expansion.

Operational Efficiencies and Capital Management

Temple & Webster’s asset-light, drop-ship model continues to support strong cash flow conversion, with operating cash flow of A$24 million in FY26 and a cash balance of A$123 million after deploying A$30 million in on-market share buy-backs. Fixed costs as a percentage of revenue declined to 10.1%, aided by AI-led automation and cost discipline, which delivered A$3 million in savings in the second half of FY26.

Margin optimisation initiatives implemented in H2 FY26, including pricing strategies, supplier support, and marketing restructure, have improved unit economics with Q4 run-rate EBITDA margins doubling to an estimated 6%. The company plans to maintain fixed costs at 10-11% of revenue in FY27 while targeting delivered margin improvements to 31-33%.

Outlook Under New Leadership

New CEO Susie Sugden, who took the helm in July 2026, emphasised the significant market opportunity ahead, particularly in underpenetrated adjacencies and international markets. Despite a 13% revenue decline in FY27 year-to-date; partly due to cycling a strong 28% growth period; contribution margin dollars are up 10%, reflecting improved unit economics.

Temple & Webster is targeting FY27 EBITDA between A$33 million and A$40 million, representing a 50-80% increase over FY26. The company plans to unveil detailed strategies to reignite double-digit top-line growth at its upcoming AGM and H1 FY27 results briefing. The focus remains on leveraging AI capabilities, expanding exclusive product ranges, and growing brand presence to capture a larger share of the estimated A$40 billion Australian furniture, homewares, and home improvement markets.