The Temple & Webster Group Ltd (ASX: TPW) share price has started the week strongly.
In morning trade, the online furniture and homewares retailer's shares are up 4.5% to $14.03.
Image source: Getty Images
Why is the Temple & Webster share price racing higher?
The Temple & Webster share price is racing higher today following the release of its annual general meeting update.
That update reveals that the company has started FY 2022 positively, with its revenue growing strongly financial year to date.
According to the release, Temple & Webster's revenue for the period July 1 to 15 October increased 56% over the prior corresponding period.
In addition, management advised that it continues to expect its full year earnings before interest, tax, depreciation and amortisation (EBITDA) margin to be in the 2% to 4% range in FY 2022. Though, it anticipates that first half EBITDA margin will be higher than this level.
The company's CEO, Mark Coulter, commented: "We continue to experience strong tailwinds, including the ongoing adoption of online shopping due to structural and demographic shifts and an acceleration of these trends due to COVID-19. A buoyant housing market and a reduction in travel spend are also supporting the growth of our sector."
"While the end of lockdowns will no doubt have the world return to a more "normal" distribution of discretionary spend, we would remind our shareholders that there is still significant growth ahead for Temple & Webster as we continue our march up the online adoption curve. Temple & Webster is a long-term growth story and periods of above and below average growth are to be expected," he added.
What about its supply chain?
Also boosting the Temple & Webster share price today was management's comments on the global supply chain challenges currently facing Australia.
The good news is that Temple & Webster is largely unaffected due to its business model and the diversity of its supplier base.
Mr Coulter explained: "The inherent flexibility and diversity of Temple & Webster's business model and supplier base is proving fruitful. We source from over 100 factories through our private label division and our drop ship suppliers are sourcing from thousands of factories, meaning we can adapt to the changing supply chain environment quickly."
"Our inventory weeks of cover levels for our best sellers (both drop shippers and private label) are at a similar position or better than this time last year. While we will no doubt see individual products move in and out of stock, we expect to see customers substitute into other similar products as we witnessed last year," he concluded.
