Azzet reports on three stocks with price moving updates today.
Temple and Webster tumbles on disappointing sales ~
Shares in Temple and Webster (ASX: TPW) were down 33.6% by 2:15 pm AEDT (3:15 am GMT), with the market appearing to have overreacted to the furniture and houseware group’s softer-than-expected market update.
At first glance, the result didn’t appear to warrant the market’s strong negative reaction, with top-line growth in the half up 18%, short of the 23% consensus forecast and down from 28% reported at the August update.
But what seems to have irked some analysts is the potential risk of further deceleration - in the wake of December trading, which is typically a quieter month for the online retailer – relative to recent updates by Nick Scali (ASX: NCK) and Mocka.
Citi analysts suspect key departures in the marketing team may have been a headwind and also pointed to insufficient evidence that the NZ expansion and WA ramp-up are delivering anticipated benefits.
RBC Capital Markets also waded in with its own Negative take on the result, and in light of December being a quieter month - and the business yet to cycle the key Black Friday sales period – flagged the potential risk for further deceleration over the remainder of the half.
The market’s reaction today has defied the company’s insistence that it actually improved its market share between 1 July and 20 November, with average order values rising 3% and active customers hitting a record high.
Management told the market today that all key indicators of the company are trending positively, with the online retailer’s home improvement division remaining the standout, growing more than 40% year-on-year.
Driven by larger orders across the holiday and student accommodation sectors, the company’s trade and commercial division accelerated to 23% growth year-to-date.
Even on the guidance front, there should have been nothing to derail market sentiment this morning.
In addition to reaffirming its focus on delivering revenue growth within its FY26 target range -on track to reach its mid-term goal of $1 billion in annual revenue - Temple & Webster also reaffirmed earnings margin guidance of 3 to 5%.
Meanwhile, with more than $150 million in cash, the company also told investors its on-market share buyback is in place and ready to be activated.
Ahead of its AGM tomorrow, the company’s CEO Mark Coulter told the market today that key leading indicators and customer cohort performance are trending positively, with average order values up 3% versus the previous period, active customers at record levels, and the proportion of orders from repeat customers continuing to increase.
Investors should look for reassurances at tomorrow’s AGM that address analysts’ concerns.
Temple and Webster has a market cap of $1.6 billion; the share price is up 21% in one year and down 44% in the last month.
The stock’s shares are in a downtrend confirmed within multiple periods.
Consensus is Moderate Buy.
Fisher and Paykel rises on outlook upgrade
Shares in Fisher and Paykel (ASX: FPH) were trading 5.7% higher after the Kiwi-based medical device maker posted a strong 1H FY26 result and upgraded its full-year profit guidance.
The company reported a 14% rise in first-half operating revenue to NZ$1.09 billion (A$950 million) and a 39% jump in net profit to $213 million for the six months to September 30.
In light of the result, the board declared an interim dividend of 19 cents per share, up from 18.5 cents.
While sales within the standout hospital division were up 17% to $692.2 million, the homecare business - which makes sleep apnoea masks – grew 10% to $395.9 million.
Aided by efficiency gains, gross margin improved 1.1 percentage points to 63%; however, the company flagged ongoing pressure from U.S. tariffs on NZ-sourced hospital products.
R&D investment totalled $114.1 million, or 10% of revenue.
Based on the strong first half result, management guided to FY26 operating revenue of $2.17 billion to $2.27 billion (previously $2.15 billion to $2.25billion) and net profit of $410 million to $460 million (previously $390 million to $440 million).
The outlook continues to include an estimated 75-basis point impact to gross margin due to U.S. tariffs and assumes current global tariff rates for the remainder of FY26.
Commenting on today’s update, CEO Lewis Gradon reminded the market that 2H FY26 remains somewhat contingent on Northern Hemisphere winter conditions.
“Available data indicates that last winter was a historically strong season, and so a similar season this year would be pushing our result towards the top end of guidance,” he said.
“Our second-half Hospital consumables growth can be influenced by year-on-year variations in the Northern Hemisphere winter respiratory season, and we don’t have any additional insights into that impact at present.”
Overall, what impressed Canaccord Genuity analysts the most was gross margin expansion, which shrugged off external pressures to expand another 60bps in constant currencies to 63%.
"Undeniably, there are a range of new drivers coming into contention as [Fisher & Paykel's] high flow nasal cannula (HFNC) modality evolves across respiratory indications and care settings," the analysts said.
"Hospital sales delivered beats across all categories. Homecare lagged our estimates fractionally but is still seeing structural tailwinds from sleep apnea industry growth.”
Fisher and Paykel has a market cap of $19.5 billion; the share price is down 2.3% in one year and up 5% in the last week.
The stock’s shares appear to be weak with little demand from investors.
Consensus is Hold.
Electro Optic Systems soars after copping $4m ASIC fine
Shareholder in Electro Optic Systems (ASX: EOS) received some welcomed respite from the defence system manufacturer's downward spiral since early October, with the market responding favourably to a Federal Court $4 million penalty after management admitted to breaching its continuous disclosure obligations.
The market was clearly relieved that today’s Federal Court decision put paid to the matter, with the share price up around 4.6% this afternoon.
What the Canberra-based company fessed up to was not disclosing a material difference in previously announced revenue – relating back to 2022 – until 14 weeks after they knew it.
Between May and June 2022, ASIC said that the company issued earnings guidance to the ASX that it expected its 2022 revenue to equal or exceed $212.3 million.
However, by July 25, 2022, the company became aware that its 2022 revenue was likely to be $164 million, with a possibility of an additional $27 million.
“EOS has accepted that it failed to correct its guidance when it became aware that its annual revenue forecast was overstated by tens of millions of dollars,” said ASIC chairman Joe Longo, who also noted that timely earnings guidance is a core obligation of listed entities.
Commenting on the outcome today, the company’s chairman, Garry Hounsell, told the market that the outcome represents a constructive resolution with ASIC that allows the business to move forward with clarity, removing the potential of protracted litigation on the matter.
“Since late 2022, we have made significant progress in strengthening our business and remain committed to best-practice and transparent communication.
“As we look to the future, we are well-positioned to execute our strategic priorities and deliver long-term value for our shareholders."
Meanwhile, ASIC is now targeting the company’s former CEO, alleging that Greene “failed to exercise care and diligence in his consideration of material downgrades worth tens of millions of dollars” to the 2022 revenue forecasts by the space, communications and defence systems manufacturer.
Greene stepped down as CEO of Electro Optic Systems in July 2022 after almost 36 years in the role, transitioning to chief innovation officer – a role he still holds.
Today’s update also coincided with the company’s completion of the $10 million acquisition of UK-based anti-drone interceptor business from MARSS Group, which was revealed in October.
The initial investment of $10 million will be funded from the company’s existing cash reserves and there will be no material impact on near-term financial results.
Based on a September update, Electro Optics is expecting full-year FY25 from existing contracts of between $115 million and $125 million.
The share price rallied in late August after the company posted better revenue and earnings than the market expected.
The company reported a 61% year-on-year revenue decline to $44.1 million within the company's guided revenue range of $40-45 million and ahead of broker forecasts of $43.9 million.
On the back of recent contract wins and its sales pipeline, Bell Potter retained its buy rating with an improved price target of $5.70 (from $5.00).
Electro Optic Systems has a market cap of $925 million; the share price is up 282% over one year and down 15% in the last month.
While the stock's 200-day moving average is trending higher, there is significant evidence that the long-term bullish trend is near an end.
Specifically, recent price action has been weak and the 5-day moving average is below both the 20 and 50-day moving averages.
Consensus is Strong Buy.
This article does not constitute financial or product advice. You should consider independent advice before making financial decisions.