Kogan.com took a beating on Friday after it provided a business update for the third quarter of FY21. Shares slumped 14% despite the online retailer highlighting that it had continued to achieve strong business growth during the period, while also progressing the integration of its $127 million NZ acquisition, Mighty Ape, as it continues tackling challenges caused by changes in market conditions arising from COVID-19.
In key highlights across the Kogan group, sales, revenue and active customers grew, earnings saw a decline:
Gross Sales grew by more than 47%
Revenue grew by more than 65%
Gross Profit grew by more than 54%
Adjusted EBITDA declined by more than 24%
Active Customers grew by more than 77% to 3,215,000 for Kogan.com and 742,000 for Mighty Ape
The company noted it continued its long term strategy of investing in technology, brand awareness, logistics capability, platform improvements, and Kogan First membership benefits to lay the foundation for future growth and provide ongoing improvements in customer experience.
During the period customer demand fluctuated below the levels seen in the prior nine months, as a result, they were required to store larger than expected levels of inventory — incurring high storage expenses and demurrage fees. They were progressively working towards optimising inventory positions to reflect current market conditions by increasing promotional activity.
Kogan.com Founder & CEO, Ruslan Kogan said “I am proud of the way the Kogan.com team has maintained a razor-sharp focus on delighting customers through a dynamic environment. The Kogan.com team has continued to deliver strong growth while investing in the future of the business and quickly adapting to changing circumstances. While short term trading conditions can fluctuate, we remain focused and committed to our long term vision. Kogan First is an important part of our long term strategy, and we are proud to have increased our investment in Kogan First membership benefits to more than $2.5 million in the quarter.”
Kogan said it looks to the future with confidence as the business has grown its Active Customer base, invested in key strategic initiatives and has a strong level of in-demand inventory heading into the EOFY and Christmas trading periods while observing price inflation through global supply chains.