Kogan.com Announces September Results, Soars Past $300 Million Sales

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Kogan.com Announces September Results, Soars Past $300 Million Sales

  • The Kogan.com Ltd (ASX: KGN) share price has been a very strong performer on Wednesday.
  • In early trade, the ecommerce company’s shares are up 8 percent to $11.85.
  • The catalyst for the rise in the Kogan shares price today has been the release of a trading update.

Kogan.com is a portfolio of retail and services businesses that includes Kogan Retail, Kogan Marketplace, Kogan Mobile, Kogan Internet, Kogan Insurance, Kogan Travel, Kogan Money, Kogan Cars, Kogan Energy, Dick Smith, Matt Blatt and Mighty Ape. Founded by Belarus-Australian serial entrepreneur, Ruslan Kogan, the website bearing his surname has grown into one of the best-known e-commerce platforms in Australia and New Zealand.

His colourful outbursts and media tactics have often put him in the spotlight, however, Kogan.com has been able to consistently grow into the mammoth which it is today with footholds in several consumer markets. Kogan’s share price has lost more than 53 Percent of its value year to date as the company had been pressured, until recently by lagging supply chains and rapid competition. Investor sentiment has changed slightly with (ASX: KGN) gaining 18.53 percent over the past 28 days signalling growing potential for the share price to reach its previous highs, this has of course been compounded by the positive news out today showing fantastic results from a previously lagging company.

Highlights from the Australian e-commerce goliath include some impressive figures such as:

Gross sales grew 21.1 percent year on year and 23.2 percent quarter on quarter to $330.5 million

Gross profit fell 1.7 percent year on year but grew 31.6 percent quarter on quarter to $52.5 million

Kogan.com Active Customers grew 30.7 percent year on year and 4.5 percent quarter on quarter to 3,351,000

Mighty Ape Active Customers fell 2.1 percent quarter on quarter to 748,000

Kogan First members grew 171.1 percent year on year and 64.4 percent quarter on quarter to 197,000

During the quarter, Kogan advised that it focused on further scaling the Kogan Marketplace and Kogan First loyalty program, improving logistics and customer service, and driving synergies through the successful integration of Mighty Ape. It notes that these initiatives underpinned growth in Kogan.com’s active customer base, cementing its position as one of the largest online shopping communities in Australia. Kogan also revealed that it resolved previous inventory pressures and closed several inefficient overflow warehouses. This reduction in inventory levels led to the company significantly reducing its warehousing costs, delivering an average variable cost saving of $0.8 million per month during the quarter compared to the fourth quarter of FY 2021.

At the end of the period, the company’s inventory had reduced by 14.7 percent to $194.3 million. This comprises $154.2 million in its warehouse (down 20 percent) and $40.1 million in transit. Given how inventory concerns have been weighing heavily on the Kogan share price, this news will no doubt be welcomed by the market. The future looks bright for Ruslan Kogan and his namesake as the company seems to be able to rectify its issues into the new year and continuing with expansion, there should be good times ahead for investors in Kogan.

Louis Mosmann

Louis Mosmann is a Private Wealth Client and Research Assistant at KOSEC- Kodari Securities. Louis covers macroeconomic events, global markets and ASX300 company announcements, allowing clients to make more informed investment decisions. Email Louis at l.mosmann@kosec.com.au.

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