Temple & Webster delivered record FY26 revenue of $664.6 million and lifted underlying EBITDA by 28%, despite a sharp fall in statutory profit after tax. The online retailer is targeting EBITDA of $33 million to $40 million in FY27 as improved margins, exclusive products and adjacent categories do more of the heavy lifting.
- Record FY26 revenue of $664.6 million, up 10.6%
- Underlying EBITDA excluding FX rose 28% to $25.9 million
- Statutory profit after tax fell 61.9% to $4.3 million
- Q4 contribution margin run-rate reached approximately 17%
- FY27 EBITDA guidance set at $33 million to $40 million
Margin recovery becomes Temple & Webster’s FY27 test
Temple & Webster Group Ltd (ASX:TPW) closed FY26 with a record top line, but the more consequential number may be the margin reset taking shape underneath it. Revenue rose 10.6% to $664.6 million, while underlying EBITDA excluding foreign exchange losses increased 28% to $25.9 million. Management is now targeting FY27 EBITDA of $33 million to $40 million, a range that would represent a substantial step up from the $21.9 million reported for FY26.
The improvement was concentrated late in the year. Changes to promotional timing and pricing, supplier support, digital marketing and fixed costs helped lift Q4 delivered margin to approximately 33.5%, compared with 30.2% for the full year. Contribution margin reached an estimated 17% on a Q4 run-rate basis, against 13.4% for FY26 as a whole, while fixed-cost savings contributed about $3 million in the second half.
Strong EBITDA masks a weaker statutory profit result
The earnings story is not uniformly positive. Profit before tax fell 20% to $11.9 million and profit after tax dropped 61.9% to $4.3 million. The company attributed the lower statutory result primarily to reduced gross margin, higher depreciation and amortisation, and a higher effective tax rate after the derecognition of a deferred tax asset linked to share-based option plans.
That distinction matters because the headline EBITDA recovery relies on non-IFRS measures and adjustments. Underlying EBITDA excluding FX removes $944,000 of Melbourne warehouse transfer costs, $2.36 million of New Zealand start-up investment and a $682,000 unrealised foreign exchange loss. The statutory accounts, meanwhile, show the cost of building the operating platform that management says should support future growth.
Exclusive ranges and adjacencies broaden the revenue base
Temple & Webster’s strategic mix continued to shift towards products it can differentiate more directly. Exclusive products accounted for 50.5% of FY26 revenue, up from 45.1%, while 82.8% of the top 500 selling products were exclusive. The company added more than 1,100 private-label options during the year and used tools including a sofa configurator, AI-assisted range reviews and enhanced shipping options to support conversion.
Growth outside the core furniture and homewares business was also material. Home improvement revenue rose 39.1% to $58.5 million, Trade & Commercial revenue increased 16.2% to $55.7 million, and the combined adjacent businesses reached $117.2 million. New Zealand, launched in October 2025, generated $3 million across more than 7,400 orders and reached contribution-margin break-even on a run-rate basis by year-end.
Cash remains strong as leadership changes take effect
The balance sheet gives the company room to pursue its plan. Operating cash flow was $23.9 million, cash ended at $122.7 million and the group remained debt-free after spending $29.9 million on its on-market buy-back. There was no dividend declared. Temple & Webster also committed to a new Melbourne warehouse and continued investment in its digital storefront, AI capabilities and personalisation systems.
The annual report formalises the leadership handover announced earlier in the year: co-founder Mark Coulter became Executive Chair on 1 July 2026, while former executive Susie Sugden became CEO. Stephen Heath moved to Lead Independent Director. The company says its immediate FY27 priority is to return to revenue growth without surrendering the improved unit economics established in the final quarter.
The unanswered question is whether growth can return without margin dilution
Temple & Webster’s guidance sets up a demanding balancing act. The company wants to return to double-digit top-line growth while preserving a Q4 margin profile achieved partly through tighter promotions, pricing discipline and cost reductions. Its addressable markets remain large, but the annual conversion rate was only 2.9% and the report notes that roughly 97% of traffic did not convert.
That leaves plenty of theoretical room to grow, but also plenty of execution risk. The next test is whether brand investment, private-label expansion, AI-led personalisation and the New Zealand rollout can turn that traffic opportunity into profitable orders. FY27’s $33 million to $40 million EBITDA range will provide the first hard measure of whether the margin reset is a durable operating improvement or simply a strong quarter that arrived ahead of the growth engine.
Bottom Line?
FY27 hinges on converting the Q4 margin reset into renewed revenue growth without giving back the profitability gains that lifted guidance.
Questions in the middle?
- Can Temple & Webster sustain contribution margins near the Q4 run rate as promotional activity and revenue growth accelerate?
- How quickly can AI personalisation and brand investment improve the 2.9% conversion rate?
- Will New Zealand, home improvement and Trade & Commercial scale without absorbing disproportionate capital or operating costs?