Online furniture retailer Temple & Webster is largely indifferent to the prospect of falling house prices and the cost of living crisis after beating market expectations with a 31% rise in his income.
The home improvement market has become an increasingly important focus for the company, following the launch of online-only DIY platform The Build earlier this year.
While rising interest rates have depressed house prices and raised the prospect of reduced discretionary household spending, Temple & Webster boss Mark Coulter said much of the Business growth opportunities are not tied to the housing market.
“In terms of general exposure to the housing market, it’s really complicated…As house prices come down, it actually becomes more affordable for young people, and young people are our main growth demographic” , did he declare.
“What we want to make sure is that we are still positioning ourselves as a very high value retailer, if you stay [in one house] and redecorate or if you are moving because you can afford to enter the real estate market now.
Much of the DIY and household goods market is also focused on replacement products, which consumers will buy if they need them, regardless of general terms, he said.
“What people don’t realize is that a lot of the category is [replacing] things that break. This type of general demand is not related to the housing market. Much of our category is immune to some of these macro forces.
Shares of Temple & Webster jumped more than 26% to trade at $5.57 after the company raised its profit margin forecast for 2023.
Net profit before tax for the full year was down 31% from last year’s figures, which had been boosted due to COVID-19 lockdowns, but the company surprised the market with higher than expected profits and strong margins.