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Why is the Temple & Webster (ASX:TPW) share price up over 3% today?

Is this online furniture retailer a lockdown winner?
The post Why is the Temple & Webster (ASX:TPW) share price up over 3% today? appeared first on The Motley Fool Australia. –

The S&P/ASX 200 Index (ASX: XJO) is having a very depressing start to the week today. The ASX 200 is currently down 0.84% to 7,287 points. One ASX share that isn’t joining the pity party today is Temple & Webster Group Ltd (ASX: TPW). The Temple & Webster share price is currently up a very healthy 3.13% to $10.89 at the time of writing.

That’s an outperformance of the broader market by around 4% – not an insignificant number. So why are Temple & Webster shares performing so well today?

Well, unfortunately, there are no easy answers to this one. Temple & Webster has not released any official news announcements today, so we can rule that out.

However, we can speculate on another possible reason why Temple & Webster shares are having time in the sun today.

Look at the ASX 200 today and you will see a bevvy of winners and losers. Shares that seem to be correlated to economic growth, such as the ASX banks, are getting hammered today. Commonwealth Bank of Australia (ASX: CBA), for example, is currently down 1% to $97.17 a share.

But other ASX shares are doing far better. Afterpay Ltd (ASX: APT) is currently up almost 1.8%. Zip Co Ltd (ASX: Z1P ) is also in the green. As is the Wesfarmers Ltd (ASX: WES) share price. Domino’s Pizza Enterprises Ltd. (ASX: DMP) shares are also in the green today, and CSL Limited (ASX: CSL) isn’t too far behind.

Are Temple & Webster shares benefitting from lockdowns?

All of these shares have something in common. They have all been classed (to varying degrees) as ‘pandemic winners’. Last year these companies proved (once again, to varying degrees) that they could not only survive, but thrive, in a COVID world.

The Temple & Webster share price fell more than 30% in the initial market crash last year that was sparked by the onset of the coronavirus pandemic. But this drop did not last long, as the online furniture and homewares retailer started proving that its business was holding up, and even growing, during the worst of the lockdowns last year.

You only have to look at the company’s FY2021 half-year earnings to see this in action. Back in February, Temple & Webster reported revenue growth of 118% to $161.6 million and earnings before interest, tax, depreciation, and amortisation (EBITDA) growth of an astonishing 556% to $14.8 million. Active customers were also up a pleasing 102% to 678,000.

Why is this relevant? Well, New South Wales and now Victoria are back in lockdown as we speak. This is obviously very bad news for the national economy, which might explain why the ASX banks and the broader market are having a rough start to the week. But investors seem to be remembering last year’s lockdown winners today. And Temple & Webster is evidently one of them.

This may be why we are seeing a healthy bump in the Temple & Webster share price today. At the current pricing, Temple & Webster has a market capitalisation of $1.31 billion.

The post Why is the Temple & Webster (ASX:TPW) share price up over 3% today? appeared first on The Motley Fool Australia.

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More reading

Why CSL, Humm, IntelliHR, & Vulcan shares are pushing higher

The CBA (ASX:CBA) share price slips as COVID loan support announced
The CBA (ASX:CBA) share price is down 5% in the past month, here’s why
The CSL (ASX:CSL) share price is down 9% in a month, here’s why
ASX 200 Weekly Wrap: ASX shakes off lockdowns to rise higher

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, CSL Ltd., Temple & Webster Group Ltd, and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO and Wesfarmers Limited. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited and Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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