Latest / What the Flux / Temple & Webster's wild drop | Aware Super's $50m marketing blitz | SkinKandy pierces the IPO market

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Temple & Webster's wild drop | Aware Super's $50m marketing blitz | SkinKandy pierces the IPO market · What the Flux

• 0:05
  Speaker 1: This is what the Flux. I'm Brett and I'm Justin
• 0:07
  Speaker 1: and it's Friday. They're twenty eight the November Chuzzi Boy.
• 0:09
  Speaker 1: Another day, another spotlight on Optus Again. Optus warned that
• 0:13
  Speaker 1: it suffered another triple zero call outage near Melbourne, impacting
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  Speaker 1: about fourteen thousand users. And that's two months after a
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  Speaker 1: broader disruption and a commitment to do better. So it's
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  Speaker 1: fair to say that Optus is not on the Australian
• 0:25
  Speaker 1: Communications and Media Authorities Gift list this Christmas could be.
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  Speaker 2: On the naughty list if you ask me to be man.
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  Speaker 2: Uh huh dam. We are back this Friday with our
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  Speaker 2: a three business or finance questions correctly and make sure
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  Speaker 2: kick off your weekend on a high.
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  Speaker 1: Three riveting stories today, Juzzy Boy, let's do it for
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  Speaker 1: our first Temple and Webster's shares have crashed over thirty percent,
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  Speaker 1: even though the company saw strong revenue growth and record
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  Speaker 1: customer numbers.
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  Speaker 2: Investors fell out their cheap Temple of Webster chairs. Be
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  Speaker 2: man out to this news, So tell me.
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  Speaker 1: What So, as we've spoken about many times before, Temple
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  Speaker 1: and Webster is one of Australia's biggest online furniture and
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  Speaker 1: homewares retailers, founded in.
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  Speaker 2: Twenty eleven during the early boom of online shopping.
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  Speaker 1: Listed in twenty sixteen and at share price polummeted.
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  Speaker 2: But it came good during the COVID years when it
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  Speaker 2: did a full turnaround and at share price went Bisier.
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  Speaker 1: And Judge wait. Temple and Webster continued to share their
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  Speaker 1: growth story to the market.
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  Speaker 2: Revenue from July to November this year jumped eighteen percent
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  Speaker 2: year on.
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  Speaker 1: Year, Active customers hit record levels and average order values
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  Speaker 1: are up three percent. But investors, we're having none of
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  Speaker 1: these results. And I mean nada, zilch zero.
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  Speaker 2: I see man. Analysts are expecting around it twenty three
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  Speaker 2: percent revenue growth for the heart.
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  Speaker 1: So it's reported eighteen percent fell short of the mark.
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  Speaker 2: Next minute, templan Wors' share price plummeted more than thirty
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  Speaker 2: percent to an eleven month low.
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  Speaker 1: When you miss consensus, the market makes you pay for it.
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  Speaker 2: So what is the key leading here.
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  Speaker 1: Consensus is the average what analysts think a company will deliver.
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  Speaker 2: It's a benchmark that fund managers use to judge whether
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  Speaker 2: a business is outperforming or underperforming.
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  Speaker 1: Now, juse boy, if a company beats consensus, the share
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  Speaker 1: price usually lifts.
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  Speaker 2: That's because the market then upgrades its expectations of future profit.
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  Speaker 1: But if a company misses consensus even slightly, the price
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  Speaker 1: can fall hard.
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  Speaker 2: Because the market needs to reset those future assumptions.
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  Speaker 1: In Temple and Webster's case, there was a five percent
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  Speaker 1: gap between its consensus revenue growth and its actual growth.
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  Speaker 2: And while that may sound small to you, be man,
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  Speaker 2: that gap matters.
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  Speaker 1: Well high growth businesses like Temple and Webster. They get
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  Speaker 1: valued very generously based on their future earnings. Juzzy boy.
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  Speaker 2: Yeah, it's a high risk, high reward game that has
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  Speaker 2: been paying off for Temple and Webster in the past, but.
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  Speaker 1: In this half that game punished them.
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  Speaker 2: So it's no surprise. Jerry Harvey, the founder of Harvey Norman,
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  Speaker 2: claims it Temple and Webster is overpriced. Tabuggery.
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  Speaker 1: For our second story, Aware Super, one of Australia's biggest
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  Speaker 1: super funds, has spent nearly fifty million dollars on marketing
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  Speaker 1: over the last year as the race for super dollars
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  Speaker 1: heats up.
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  Speaker 2: Nothing like seeing my superannuation dollars going into marketing tell
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  Speaker 2: me more so, Juzzy boy.
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  Speaker 1: We know that Australia's super industry is an apps loop
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  Speaker 1: behemoth right now.
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  Speaker 2: It's estimated there is more than four point three trillion
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  Speaker 2: dollars in super money around Australia.
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  Speaker 1: And it continues to grow year over year as more
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  Speaker 1: Australians are forced to contribute money.
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  Speaker 2: So it's fair to say the competition for those super
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  Speaker 2: dollars is turning quite fierce.
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  Speaker 1: And now it's been revealed that Australia's industry super funds
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  Speaker 1: are spending tens of millions of dollars on marketing and sponsorships.
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  Speaker 2: Every year to woo new super customers. Yeah.
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  Speaker 1: In first place comes Aware Super, who spent forty eight
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  Speaker 1: point six million dollars on marketing last year, including sponsoring
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  Speaker 1: the GWS Giants and Netball New South Wales. We've got
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  Speaker 1: host Plus and the Australian Retirement Trust were not far
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  Speaker 1: behind with around thirty five million buckers each, and they man.
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  Speaker 2: Retail super funds. Supposedly the for profit ones, they actually.
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  Speaker 1: Spent far less, and now the regulators are asking a
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  Speaker 1: few pointed questions.
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  Speaker 2: In particular since their industry and not for profit super funds.
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  Speaker 1: Yeah, the industry super funds need to prove that these
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  Speaker 1: sponsorships and flashy campaigns actually benefit their end members.
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  Speaker 2: So what is the key leading here?
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  Speaker 1: If it not for profit is spending members money, they'd
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  Speaker 1: better be able to prove it actually helps members.
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  Speaker 2: You see the man. Industry funds argue that marketing is
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  Speaker 2: actually for the long term best interests of their current customers.
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  Speaker 1: Marketing attracts new members, New members boost their scale, larger scale,
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  Speaker 1: reduces member fees, and ultimately the notion is that it
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  Speaker 1: costs their current members less over the long term. But juseboy,
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  Speaker 1: marketing spend that benefits the brand without improving financial outcomes
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  Speaker 1: becomes pretty difficult to justify.
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  Speaker 2: Yep. The retail funds, which are for profit, can argue
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  Speaker 2: that marketing is a commercial cost of doing business, but
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  Speaker 2: even they are spending less.
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  Speaker 1: Colonial First State, for example, they spend just over five
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  Speaker 1: million bucks on marketing last year, and Old Vanguard they
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  Speaker 1: spent just under eight million bucks.
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  Speaker 2: So industry super funds are spending a lot more and
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  Speaker 2: right now OPRAA isn't convinced that all that spend is justified.
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  Speaker 1: For our third and final story, skin Candy, the Australian
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  Speaker 1: body piercing and jewelry business, is getting ready for a
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  Speaker 1: four hundred million dollar IBO, but it does not have
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  Speaker 1: history on its side, and.
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  Speaker 2: I've been a big fan of skin Candy in the past.
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  Speaker 1: Pans So skin Candy, for those who are not aware,
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  Speaker 1: is a Queensland born body piercing and jewelry business that
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  Speaker 1: started back in twenty ten with just one store.
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  Speaker 2: But over the past fifteen years it's growing to over
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  Speaker 2: ninety stores across Australia and New Zealand.
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  Speaker 1: Now skin Candy service isn't just the standard ear piecing
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  Speaker 1: number Juzzy Boy.
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  Speaker 2: You can piece elips, your eyebrowity, belly button as well
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  Speaker 2: as sixty five other body placements.
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  Speaker 1: Too much information that Juzzy Boys just slow down, But.
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  Speaker 2: They also sell the billing that you need for your
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  Speaker 2: fresh piercing as well.
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  Speaker 1: Up until now, skin Candy has been funded by private equity,
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  Speaker 1: but now they're looking to pierce into the public markets.
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  Speaker 2: Yep, skin Candy's preparing for a twenty twenty six IPO
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  Speaker 2: and they're gunning for a four hundred million dollar valuation
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  Speaker 2: to expand their business into the US.
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  Speaker 1: But history shows jusey boy that beauty related IPOs do
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  Speaker 1: not always go as plants.
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  Speaker 2: That's true, So what is the key learning here?
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  Speaker 1: Public markets love a beauty story, but they hate unpredictable earnings, and.
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  Speaker 2: A major challenge for beauty retailers is the consumers can
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  Speaker 2: be a little bit volatile with their beauty spending.
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  Speaker 1: In recent years, the demand for body piercings has really
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  Speaker 1: own as people view piercings as a form of self expression.
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  Speaker 2: Like yourself. But if piercings go out of fashion, the
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  Speaker 2: business can lose their sales pretty pretty quickly.
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  Speaker 1: We've seen it happen before with Silk Laser Clinics.
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  Speaker 2: Yes, Silk had the private equity backing and then listed
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  Speaker 2: on the ASEX with an enterprise value of one hundred
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  Speaker 2: and sixty mil But once.
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  Speaker 1: It hit the ASX, it or really battle to keep
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  Speaker 1: up with high investor expectations.
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  Speaker 2: And three years later it was taken private by Woolworths
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  Speaker 2: at one hundred and eighty million dollar valuation because it
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  Speaker 2: didn't quite light up the markets. So even with fast
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  Speaker 2: growth and the strong demand from skin candy. They need
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  Speaker 2: to show that their march into stable and their earnings
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  Speaker 2: are predictable to win the hearts and minds of investor.
• 6:35
  Speaker 2: Flucks aam. If you want to CHICU weekend off and
• 6:36
  Speaker 2: a high rolling into December with fifty bucks in your pockets,
• 6:39
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  Speaker 1: Thanks for listening and we'll see you on Monday