Temple & Webster Expects Higher FY27 Earnings Despite Weaker Sales

what happened

According to Smallcaps.com.au, the Australian online seller of furniture and homewares Temple & Webster has kept its outlook for a sharp rise in earnings this financial year. It now sees FY27 EBITDA of $33m to $40m, implying growth of 50% to 80% on FY26.

Sales from 1 July to 19 October were down 8% year on year, yet contribution margin dollars climbed 16% on unaudited management figures. The company expects revenue to return to growth from late February 2027, once comparisons reflect similar promotional levels. The change is driven by a shift toward higher-margin ranges, less aggressive discounting and a larger share of exclusive lines, which now make up more than half of group revenue.

AI tools also play a central role: AI-powered suggestions for complementary products lifted conversion by 56%, and the New Zealand site reached contribution-margin break-even within nine months of launch.

why it matters

For markets, the update signals a deliberate trade-off: the company is prioritising profitability over sales volume. Investors will look for evidence that revenue growth resumes as guided, since the earnings forecast depends on it. The company held $123m in cash at 30 June after a $30m share buy-back, and says its forecast includes funding for planned growth initiatives.

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