“We’re not resting on our laurels”: Kogan earnings slashed by $42.7 million in FY22

“We’re not resting on our laurels”: Kogan earnings slashed by $42.7 million in FY22

Kogan founder and CEO Ruslan Kogan.

The founder and CEO of Kogan.com (ASX: KGN) has declared the company will not be complacent following the release of a trading update that flagged an earnings dive of $42.7 million in FY22.

The adjusted EBITDA results, which also detailed how the company’s Australian arm delivered just $6.9 million in earnings in the full year compared to $54.9 million the year before, were $19.1 million in total - down from $61.8 million in FY21.

On the flip-side, the Melbourne-based firm’s New Zealand e-commerce business Mighty Ape reported EBITDA almost double that of Kogan’s main site at $12.2 million, up from $6.9 million the year before.

Gross sales improved marginally by just 0.1 per cent to $1.18 billion, while gross profit fell by 9.4 per cent to $184.6 million - down from $203.7 million the year before.

“We're not resting on our laurels though,” Ruslan Kogan said.

“We are making the business leaner to enable us to pass on cost efficiencies to customers in the form of lower prices.

“A leaner company means we discontinue parts of the business that are not delivering value to customers or shareholders, and also gives us the flexibility to respond to significant ongoing changes in the macro environment.”

Investors reacted well to the founder's comments this morning with KGN shares rising 34 per cent to $4.20, although this is still well below their $8.92 trading level at the start of 2022.

RELATED: Kogan “recalibrating” for softer e-commerce market

Demonstrating that the e-commerce boom is not slowing down on the consumer side, Kogan reported group active customers grew to nearly 4 million in the 12 months to 30 June.

In addition, Kogan First membership - the company’s loyalty program - has grown by 210 per cent since FY21 to over 372,000 people.

Despite the dive in earnings and profit for the full year, Ruslan remains optimistic that e-commerce is the future, and that his company is well-placed to serve Australian online shoppers.

"Times are changing. In uncertain times, people don't want to alter their lifestyle but they are happy to shift the way they shop. We know that in an environment where great value becomes even more important, Kogan.com serves an important need,” Ruslan said.

"Our Business was built for this. Efficiency and speed has been at the core of how the Kogan.com team operates for 16 years now. We're honoured that there are millions of Active Customers in the Group that have seen the value we provide.

“When the Australian public was asked to vote for their favourite online retailer, Kogan.com was voted the Australia Post ORIAS People's Choice Retailer of the Year for the sixth year in a row. This is perfect validation of the value we create for the people that matter most - our customers.”

KGN also detailed how it has net cash of $31.2 million, up from $12.8 million at the end of FY21.

Total inventories were $161.1 million, with $139.2 million in warehouse and $21.9 million in transit, reflecting a “significant unwinding” of inventories from $227.9 million at the end of FY21.

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