TPW -17.82%: Was hit hard today with the FY26 result missing expectations and, more importantly, a sharp deterioration in current trading raising questions over when growth will return. The online furniture retailer is highly leveraged to housing turnover and discretionary spending, and with sales down 13% over the first seven weeks of FY27, management has understandably declined to provide revenue guidance and lowered the earnings bar.
Key results:
- Revenue of A$664.6m, up ~11% but ~1% below A$669.3m expected.
- EBITDA of A$21.9m, broadly in line with A$21.2m expected.
- EBIT of A$9.0m, ~11% ahead of A$8.1m expected.
- NPAT of A$4.3m, down 62% and ~42% below A$7.4m expected.
- Adjusted EPS of 3.5c, ~46% below 6.5c expected.
- Gross margin of 31.5%, broadly in line with expectations.
- Free cash flow of A$18.6m, ~19% below A$23.0m expected.
The real issue isn’t FY26, it’s what comes next. Revenue has fallen 13% year-on-year in the seven weeks to August 17, albeit cycling a very strong +28% comparable period, while management has reduced FY27 earnings (EBITDA) guidance to A$33–40m from ~A$40m previously and provided no revenue guidance. That’s particularly uncomfortable when consensus was looking for FY27 revenue of ~A$701m and EBITDA of ~A$36m – the EBITDA range technically brackets expectations, but the lack of sales visibility makes it a tough ask.
MM’s view: TPW has a strong online position and the earnings model retains significant operating leverage when sales recover, but right now the macro is firmly working against it. A 13% decline in early FY27 sales is the number that matters, and until housing turnover and big-ticket discretionary spending stabilise, forecasts remain vulnerable. After a ~70% fall in the shares over the past year, plenty of bad news is now reflected in the price, but cheap alone isn’t a catalyst.
MM remains neutral toward TPW
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