Temple & Webster (ASX:TPW) Crashes 33% Despite 20% Revenue Growth- Time to Buy the Dip or Stay Away?

Temple & Webster Slumps on Margin Concerns

Temple & Webster (ASX: TPW) was smashed 33% on Thursday, closing at A$7.64 after releasing half-year results that told two very different stories depending on how you read them. On one hand, revenue jumped 20% to AUD 376 million, and the company grabbed a record 2.9% share of Australia’s furniture and homewares market. On the other hand, the stock has now lost roughly 45% since the start of 2026 and trades about 74% below its 52-week high of A$29.06.

The sell-off was not about what Temple & Webster delivered; it was about what it didn’t. Everything grew except the one metric the market cared about most: margins. Management reaffirmed EBITDA margin guidance of 3 to 5% for the full year but offered no upgrade, and for a stock priced for perfection heading into these results, that simply was not enough.

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Winning Market Share But the Margin Question Won’t Go Away

Looking beyond the headline numbers, there are real signs that the business is improving. Repeat customers now make up 62% of orders, showing that people are coming back to buy again, not just responding to one-time ads. The share of exclusive products has also increased to 49% of sales, up from 45% last year. This is important because it gives the company more control over prices in the long run.

The problem for investors is that these positives are not yet improving profits. The EBITDA margin is still around 4%, barely higher than before, despite strong sales growth. When the stock was trading at high valuations before the results, the market expected clear signs that profit margins were rising. That did not happen.

Management has explained the reason clearly. The company is focused on growing quickly and aims to reach AUD 1 billion in revenue by FY28. The plan is to become more profitable later, once fixed costs make up a smaller share of total sales. This strategy makes sense for an online retailer trying to build scale, but the sharp fall in the share price shows that investors are starting to lose patience.

The Balance Sheet Gives TPW Something Most Growth Stocks Don’t Have

Here is where Temple & Webster stands apart. The company ended the half with AUD 161 million in cash and zero debt, meaning it can fund its entire growth plan without raising capital or diluting shareholders. That kind of financial independence is rare among Australian growth stocks chasing ambitious targets.

The newer parts of the business are gaining traction too. Home improvement revenue surged 47%, Trade & Commercial sales grew 24%, and the New Zealand launch pulled in over AUD 1 million in just four months. Combined with an active buyback program that still has more than 11 million shares available, management is backing the business with its own cash flow rather than asking shareholders to fund the journey.

The Investor’s Takeaway for Temple & Webster

At A$7.64, Temple & Webster is sitting at its 52-week low, and the risk-reward profile looks very different here than it did at A$14 or A$20. This is a business growing revenue at 20%, fully self-funding that growth, and expanding into new categories, yet it is being priced as though something is broken.

The key risk is simple. If margins remain stuck at 3 to 5% even as revenue climbs towards AUD 1 billion, the stock will struggle to re-rate. Revenue growth alone will not drive a recovery; the market wants to see that growth translating into real earnings power.

We believe Temple & Webster is a better business than the recent price suggests, but the recovery rests squarely on margin delivery. Investors should watch the second-half margin trend, buyback pace, and New Zealand scaling. For patient investors willing to back a scale-first strategy through a bumpy stretch, this could prove to be an attractive entry point, but only if the profit eventually follows the growth.