High Expectations Hurt Kogan

By Glenn Dyer | More Articles by Glenn Dyer

Shares in Kogan.com sold off yesterday after hitting an early high of $7.92 in early trading on news of a solid trading update given to the company’s annual meeting.

They ended the session at $7.09, a fall of 6.9%.

That comes after a surprise 6.7% jump in Monday’s weak market when the ASX 200 was down 26 points. The index jumped more than 47 points yesterday.

Kogan said revealed gross sales increased 18.5% compared to last October, and gross profit was up 22.9%.

Kogan said these figures took into account all its operations, which include its mobile, internet, insurance, credit cards and home loan businesses, among others.

Analyst were largely positive but it seems the all-time high triggered a bout of profit-taking.

Kogan indicated that growth had continued from the company’s first quarter, which saw similar increases for profit and sales on the prior corresponding period.

The company claimed that operating costs fell 8.6% in October, due to reduced marketing costs. Active customers also grew to 1.66 million, with year-on-year growth over 13%.

CEO Ruslan Kogan said while the results were promising, the second quarter was the most important period for the business.“

While the first 4 months of the financial year are exhibiting strong growth metrics, we know that the business end of the year is ahead of us with the Christmas trading period of November and December,” he said in the release yesterday.

“These are usually the most important trading months of the year for us.” (As it is for every company involved in retailing).

Kogan shares are up 110% since the start of the year, but are still down over 20% from their all-time high of $9.85 in 2018.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

View more articles by Glenn Dyer →