Kogan shares collapse on softer trading and margins
Investors have looked beyond upbeat forecasts by online marketplace Kogan.com of an improving earnings trajectory and growth for its loyalty program over the third quarter to panic over flagging sales and disappointing pre-tax earnings to send the shares crashing almost 30 per cent.
Shares in Kogan.com collapsed by 27.7 per cent on Wednesday to $5.08 after the online retailer released its third-quarter sales and adjusted earnings performance, and provided an update to its loyalty program.
The market reacted violently to the trading update, sending Kogan.com shares diving, with analysts pointing to a disappointing sales number for the quarter and lower-than-expected margins.
The market was more content with growth for the loyalty scheme and news Kogan.com would launch a new travel and hotels pillar to its ranks. But by noon, shares in Kogan.com remained weak, and were down 26 per cent to $5.19.
On Wednesday, Kogan.com said gross sales for the third quarter of $178.3m were down 6.2 per cent; revenue of $105.9m was down 2.4 per cent. This compared with some analysts’ second-half growth expectations of almost 3 per cent.
Kogan.com said in the trading update that gross profit was up 13.8 per cent to $39m, driven by improved gross margin of 36.8 per cent, up 5.2 percentage points over the quarter.
Kogan.com did not provide guidance for its net profit, but said adjusted earnings of $5.3m was against just $200,000 recorded for the third quarter of 2023. At the end of the third quarter Kogan.com was sitting on $34.1m in cash and no debt.
RBC Capital Markets analyst Wei-weng Chen said the third quarter sales and margin update were softer than expected.
Kogan.com chief executive Rusland Kogan was more positive. “Kogan FIRST has become the north star for the business, creating immense value for our loyal customers.”
Mr Kogan also said it would continue to grow the benefits through the program, launching Kogan Travel hotel deals.