- 01FY27 EBITDA forecast at $33m-$40m, up 50%-80%.
- 02Revenue fell 8%, but contribution margin dollars rose 16%.
- 03Revenue growth expected to resume from late February 2027.
Temple & Webster Group (ASX: TPW) has reaffirmed its forecast for a sharp increase in earnings this financial year despite sales remaining below the previous corresponding period as it shifts towards higher-margin products and more disciplined discounting.
The online furniture and homewares retailer expects EBITDA of $33 million to $40m in FY27, representing growth of between 50% and 80% over FY26.
Revenue for the period from 1 July to 19 October was 8% lower than a year earlier, but contribution margin dollars increased 16% on an unaudited management-account basis.
Management expects revenue growth to resume from late February 2027 as trading comparisons begin to reflect similar levels of promotional activity, while retaining the improved economics of its new strategy.
Trading Trends and Financial Outlook
Sales for the period from 18 August to 19 October fell 4% against the comparable period, an improvement on the decline recorded across the financial year to date.
The 8% revenue decline is measured using checkout revenue before accounting adjustments, while the 16% contribution margin increase uses revenue adjusted for estimated refunds but excludes deferred revenue.
Temple & Webster recorded FY26 revenue of $665m, an 11% increase, and EBITDA of $21.9m, up 17% with a margin of 3.3%.
Excluding significant items and unrealised foreign exchange losses, FY26 EBITDA reached $25.9m, representing 28% growth.
The retailer held $123m in cash at 30 June following a $30m share buy-back, and says its forecast FY27 earnings range includes funding for planned growth initiatives.
Marketing and Product Strategy
A Brisbane brand campaign produced a 7% revenue lift and an 11% traffic increase against control markets, prompting the retailer to extend the campaign into Sydney and Melbourne.
The trial also generated a 14% improvement in branded search share relative to the rest of Australia, with management targeting 40% to 60% of marketing expenditure on brand and AI-assisted mid-funnel campaigns by FY29.
At the product level, the business is reducing entry-level ranges and prioritising mass-mid market customers, quality, and exclusive products rather than deep discounts.
A bedding-linen trial recorded an 8% revenue increase, an 11% year-on-year lift in delivered margin and a fivefold increase in private-label penetration after the changes.
Exclusive lines now account for more than half of group revenue, while the retailer aims to grow private-label products to more than 35% of revenue.
AI Investment and Market Expansion
Temple & Webster is expanding AI-driven shopping recommendations, pricing, and marketing, including development of a personalised assistant built around its customer and product data.
AI-powered complementary-product recommendations increased conversion rates by 56%, while tailored delivery pricing delivered an estimated $1.2m annualised margin benefit without reducing conversion.
The retailer has republished about 58,000 product pages for AI assistants and is deploying automated analysis across suppliers, carriers, technology and commercial operations.
Its expansion strategy includes a dedicated New Zealand website, with AI agents used to build the storefront and a proposed operating model combining automation with human supervision.
Growth adjacencies generated $117m in FY26 revenue, while New Zealand reached contribution-margin break-even within nine months of launch and management is assessing larger markets for future expansion.
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