Temple & Webster’s shares have more than halved after the online homewares retailer slashed its full year earnings forecast.
Investors dumped shares in the retailer, wiping about $45 million off its market value in the process, as it warned it would miss its revenue and earnings forecasts.
The warning came as the retailer on Thursday reported its first set of interim financial results since listing on the share market last December.
While shoppers had been spending more money on its website, the company’s advertising and marketing campaigns had failed to attract lots of new customers.
The company warned its full year revenues could come in up to 10 per cent below the $76.2 million forecast in its prospectus.
Its $8.5 million underlying loss forecast could also blow out by up to $5.5 million.
Shares in the company nosedived to 20.5 cents, down 42.5 cents from its previous close of 63 cents. The stock is now just a fraction of the $1.10 investors paid during the retailer’s IPO.
Managing director Brian Shanahan said marketing had not performed as expected, leading to fewer customers.
“The initial campaign and sales outcome has taught us a lot,” Mr Shanahan said.
“We will be fine tuning our marketing spend, customer acquisition channels and product mix during the second half to improve new customer and sales performance.”
Mr Shanahan said revenue per active customer had actually risen to record levels, and Temple & Webster is now focused on building better customer retention.
“We remain the largest player in a high growth segment and are well capitalised with circa $27 million in cash and no debt,” he said.
The company is confident it will break even in the 2018 calendar year, Mr Shanahan said.
Temple & Webster’s first half net loss widened to $17.7 million from $3 million.
Costs associated with the company’s sharemarket listing and the acquisition of furniture e-tailers Milan Direct and Zizo weighed on the result.
Pro-forma underlying losses were $7.5 million, compared to $7.8 million a year earlier.
TEMPLE AND WEBSTER GETS HAMMERED
* Net loss increases to $17.7m from $3 million
* Sales revenue up 47.2pct to $21.3m
* No interim dividend declared