The ASX-listed E-Commerce Index may be ahead of the ASX 200, but not all retailers are bringing the average up.
The Power Retail ASX E-Commerce Index increased by 7.5 percent over the last 90 days, following strong gains led by Cettire, Temple & Webster and Booktopia.
Even before the release of its unaudited earnings, Temple & Webster’s share price was showing signs of investor confidence. After announcing that unaudited EBITDA was ahead of market forecast, rising 141 percent to $20.5 million, the ASX responded with a bump to share price, opening at $11.61 and closing at $12.47 on Tuesday. Revenue for Temple & Webster grew an impressive 85 percent to $326.3 million, evidence of the pandemic push redirected consumers online.
While still encouraging, Temple & Webster’s results show that sales growth has slowed since the peak of the pandemic in 2020. But far from returning to pre-pandemic times, e-commerce is still growing steadily.
“While lockdowns during 2020 and 2021 have accelerated the underlying shift from offline to online, pleasingly we continue to see strong growth even when comparing against COVID impacted numbers,” Temple & Webster CEO Mark Coulter said.
Since the start of the pandemic, there have been concerns around growth potential, yet this strong start to 2022 should show the market that in the near term, e-commerce companies are performing well (and in most cases, ahead of the ASX 200).
Power Retail Australian Listed E-Comm Index, based on ASX reporting
Perhaps in anticipation of full-year results in the coming weeks, Adore Beauty has experienced a bump of 5.1 percent, Booktopia shares increased 9.6, and the Cettire share price increased 14.3 percent over 90 days.
In contrast, MyDeal has shed 21.9 percent over 90 days. No doubt it was expected that the release of its Q4 FY21 Quarterly 4C Report to the ASX, billed as ‘the strongest result in the Company’s ten-year history’, might lead to a groundswell of support, but investors seem unimpressed with yesterday’s news. It opened at $0.625 and closed at….$0.625. While most of the ASX Listed E-Commerce Index (averaging 7.5 percent growth over 90 days) is tracking well ahead of the ASX 200 (averaging 5.2 percent over 90 days), MyDeal dropped 21.9 percent over the last three months. Despite its huge pandemic-fuelled topline growth in FY21 (111 percent), investors are seeing a lot more to like in established rival Temple & Webster. MyDeal holds a healthy cash balance of $42.7 million as at 30 June 2021, and seeing full year reporting including marketing spend will give the market a better idea of the output needed for its retention strategy and active customer acquisition. The story for MyDeal’s future value prospects will unfold in the coming period where the 2020 tailwinds have disappeared.
Kogan looks like investors are unsure of the future landscape, with a small 3.8 percent uptick over 90 days and question marks raised over its stock management in recent weeks. Redbubble’s 1.3 percent growth tells a similar story. While MyDeal may not have benefitted from its results announcement yesterday, there’s no doubt we’re in for a few swings as we enter the next few weeks and full year reporting begins.
Figures are current as at close of ASX on 27 July 2021. This is analysis only and not intended as investment advice.
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