Kogan shares plunge 13 per cent despite record gross sales exceeding $1 billion

Kogan shares plunge 13 per cent despite record gross sales exceeding $1 billion

Kogan founder and CEO Ruslan Kogan.

Online retailer Kogan (ASX: KGN) recorded a 52.7 per cent spike in gross sales to surpass $1 billion for the first time in FY21, but profitability has suffered due to one-off costs relating to inventory, logistics and the 2020 acquisition of NZ-based online retailer Mighty Ape.

This meant that while underlying profits were up 43.2 per cent at $42.9 million, the statutory net profit after tax (NPAT) was down 86.8 per cent at $3.5 million.

The result spooked investors this morning, sending KGN shares down by 13.33 per cent to $1.75 each.

Excess inventory was the main driver of the one-off charge, pushing up variable costs by $44.9 million, as well as marketing costs for promotions aimed at offloading the surplus stock.

Logistics charges of $7.7 million were incurred as a result of COVID related warehousing and supply chain interruptions from late 2020 to April 2021, while $12 million has been put aside for payments of 'people costs' relating to tranches associated with the Mighty Ape acquisition.

Kogan reports the newly acquired Mighty Ape team and operations are progressively being integrated into the group, with the new business generating gross profit of $19.9 million and achieving its forecast EBITDA of $14.3 million.

"Over the past 12 months, Kogan.com turned 15 years young, surpassed $1 billion in gross sales for the first time ever, surged past three million active customers, had record-breaking Black Friday sales, and made our largest ever acquisition to accelerate our expansion into New Zealand," CEO Ruslan Kogan said.

"It's been a challenging year for so many people around the country. I’m proud that our team remained focused through difficult COVID-impacted operating conditions and found ways to support our customers when they needed our help most.

"Over the past 18 months we have witnessed a massive swing towards the eCommerce retail revolution, one Kogan.com has been ready and waiting for, for well over a decade. We look forward to continuing our quest to delight our customers by making the most in demand products and services more affordable and accessible."

 

Enjoyed this article?

Don't miss out on the knowledge and insights to be gained from our daily news and features.

Subscribe today to unlock unlimited access to in-depth business coverage, expert analysis, and exclusive content across all devices.

Support independent journalism and stay informed with stories that matter to you.

Subscribe now and get 50% off your first year!

Four time-saving tips for automating your investment portfolio
Partner Content
In today's fast-paced investment landscape, time is a valuable commodity. Fortunately, w...
Etoro
Advertisement

Related Stories

Women's jobs site Freelancing Gems sells membership business to owner of Beam Awards

Women's jobs site Freelancing Gems sells membership business to owner of Beam Awards

Rockhampton-based Beam in Business, the company behind the diversit...

Record Australian vintage buoys Penfolds amidst China re-entry, higher earnings

Record Australian vintage buoys Penfolds amidst China re-entry, higher earnings

The company behind Penfolds wine is reporting an expected 14.6 per ...

Melbourne-founded digital teaching assistant Sindy.ai accepted into Berkeley SkyDeck accelerator

Melbourne-founded digital teaching assistant Sindy.ai accepted into Berkeley SkyDeck accelerator

After Australian venture capital (VC) firms showed little interest ...

Eagers back-pays $16m in underpayments to staff

Eagers back-pays $16m in underpayments to staff

Australia's largest car dealership group Eagers Automotive (ASX...