TPW -4.51%: the furniture & homewares e-commerce company announced FY23 results today which were largely in line or better, however, shares fell on softer guidance. Revenue fell -7% YoY to $395m, in line with consensus. NPAT dropped -40% to $8.3m though this was still a ~12% beat on analyst numbers given the downbeat expectations. The big tick for TPW was EBITDA margins of 3.7%, hitting the 3-5% target range, so it came as a surprise to the market that the company will look to spend big on marketing in an effort to grow sales at the expense of EBITDA margins. TPW has a lofty $1b in sales target in 3-5 years, but will need to be happy with margins of 1-3% in the meantime, banking on the scale benefits of more sales in the long term.
- The sales targets and market spending is a big change of strategy when investors have been focussed on profitability.
MM is neutral TPW
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