Temple & Webster shares soar as sales surge

Temple & Webster says its sales were up 26 per cent to $498 million in the year to June 30, and strong growth has continued into the new financial year. Sales from July 1 to August 11 were also up 26 per cent, compared to the same period a year ago, the furniture e-retailer announced on Tuesday. Its before tax profit was down 46.9 per cent to $6.4 million, however, which the company said reflected its strategy to accelerate growth and capture additional market share as well as the writedown of a failed AI investment. "We continue to execute on our ambition of growing market share and establishing Temple & Webster as the go to brand for the next generation of home shopper," said chief executive Mark Coulter. "At our mid-term target of $1b+ in annual sales, we believe our strategic moats around range, being a top-of-mind brand, data and AI capabilities, low fixed costs and new growth plays will be firmly entrenched." Temple & Webster said its internal AI team had developed a generative AI solution that was now powering a suite of tools from product recommendations to live chat interactions with customers, saving millions in costs while improving conversion rates by more than 10 per cent. The company has previously said its AI tool is powered by ChatGPT. Temple & Webster's investment in an Israeli AI startup has proven less successful, however. Renovai is devoted to developing AI interior design tools but Temple & Webster has written off its one-third stake in the company entirely, "given the uncertainty regarding Renovai's ability to generate future economic benefits for the group." Temple & Webster recognised a $4.7 million loss writing off that investment. The company also said that current Morgan Stanley executive Cameron Barnsley would join its team as chief financial officer on September 2, replacing Mark Tayler, who will focus on investor relations and growth. Temple & Webster ended the financial year with $116 million in cash and no debt, leaving it in a strong position for potential takeover opportunities. Temple & Webster shares finished up 23.3 per cent to a four-month high of $11.71.