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Online furniture and homewares retailer Temple & Webster (ASX: TPW) has followed up its first full year profit result in FY19 with a healthy half yearly result.
The company is seeing its pure play model pay off as the Millennial market begins to enter its target demographic, with that gamble paying dividends during 1H20.
The group reported revenue of $74.1 million in 1H20, up 50 per cent year on year, with its active customer base up 45 per cent on 1H19.
Temple & Webster CEO Mark Coulter says the company is experiencing growth as more Australians cotton on to the brand.
"Temple & Webster has had another amazing half, with revenue growing 50 per cent year on year," says Coulter.
"This was primarily driven by an increase in active customers, with more than 300,000 Australians shopping with Temple & Webster in the last 12 months."
"As market leader we remain in the best position to take advantage of the continued shift from offline to online driven by changing customer preferences and demographic shifts. Our strategy of being a category specialist with a clear customer offering built around the largest range of furniture and homewares in the country, combined with the most inspirational content and the best customer service is working."
The company certainly expects things to continue growing as it continues to capture a large slice of the $13.9 billion addressable market.
As the online leader in the furniture and homewares market Temple & Webster is comparably an early adopter in the retail niche, with only four to five per cent of the sector having moved online.
Temple & Webster anticipates its recently profitable business model will only continue to grow as the Millennial generation enters its target demographic of 35 to 65 year old's.
The company also cites the adoption of faster internet speeds, the entrance of Amazon into Australia and new technologies like augmented reality as structural changes in the company's favour going forward.
Looking to the remainder of FY20 the company says the second half has started well, with YoY revenue growth of >50 per cent.
Temple & Webster will be reinvesting short term operating leverage into growth initiatives like technology, data, mobile, private label and logistics, all while remaining profitable.
Shares in Temple & Webster are up 17 per cent to $3.31 per share at 10.45am AEDT.
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Business News Australia
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