Temple & Webster says US-China trade war ‘net positive’ for online furniture retailer

Temple & Webster says the trade standoff between the Trump administration and China has been a “net positive” for the online furniture retailer as it posts a jump in revenue.

Temple & Webster shares closed $1.37 higher at $18.60 on Wednesday after the company said it also expected its full-year earnings margin to be at the top end of guidance of between one per cent and 3 per cent.

In a trading update, the retailer said growth accelerated over the half, with revenue up 18 per cent between January 1 and May 5 compared with the same time last year. Since March 1, revenue has grown 23 per cent.

Its growing home improvement category — which includes bathroom and kitchen fixtures, wallpaper and ceiling fans — continued to outperform, with half-to-date revenue up 42 per cent.

Temple & Webster chief executive Mark Coulter said its ability to grow market share was achieved amid persistent cost-of-living pressures, cyclone Alfred on the east coast, a Federal election and broader global uncertainty.

“Our focus this half has been to ensure we have the right products, price points and promotions to drive engagement and conversion, a strategy which is clearly resonating with our customers,” he said.

He added the US-China tariff war so far had been a net positive for the business, most directly felt through lower inbound shipping rates of about 20 per cent.

The Sydney-based company sells more than 200,000 products — ranging from furniture, homewares and home renovation — and operates a drop-ship model where suppliers ship directly to customers.

Its suppliers are located in China, as well as Malaysia, Vietnam and the Philippines.

“If these deflationary effects continue, combined with some of the macro tailwinds we are seeing (such as reducing interest rates and stimulatory Australian Government policies around housing), we should see market conditions improve further,” Mr Coulter said.

US and Chinese officials are set to start talks this week to try to deescalate the trade war between the world’s two biggest economies.

Beijing slapped the US with a 125 per cent tariff after President Donald Trump imposed new import taxes on Chinese goods of up to 145 per cent.

Earlier this week, plus-size women’s fashion retailer City Chic said it had the option to pull the plug on its US operations if talks between the US and China failed to resolve the trade war.