Shares in online electronics retailer Kogan plunged 22% on Monday after a trading update fell short of market forecasts.
The report revealed weaker sales of private-label products which saw Kogan miss expectations for its half-year sales and profit growth.
Updating the market ahead of its half-year results next month, Kogan said it had booked record-high growth for its gross sales and profit, up 16% and 9% respectively.
These figures were well below market expectations, with analysts predicting an 18% lift in gross sales and a 22% jump in gross profit.
As a result, Kogan’s share price plunged 22 percent to close at $6.18, as investors punished the profit miss.
Chief executive Ruslan Kogan defended the company’s performance in its exclusives division, telling the media it showed “solid growth from a much larger base”.
“While it’s still growing stronger than the overall business, it’s not as strong as the 30 percent-plus growth we had for several years during a time when the business was much smaller,” he was quoted as saying.
He indicated growth in the company’s new marketplace division, which offers an eBay-style service where individuals sellers can list their products online, which may have had an impact.
Marketplace’s gross sales grew 44% in the second quarter when compared to the first quarter.
For the first quarter, Kogan’s gross profit grew 28% on the prior corresponding quarter, and exclusives revenue grew 35%. Despite a moderately weak first quarter in 2018-19, the overall slower growth for the half indicates the key Christmas trading period may have been weaker than expected.
The company said yesterday that inventories were $94.2 million as at December 31, 2019, comprising $81.1 million inventory in warehouse and $13.1 million inventory in transit, and inventory turn improved on the prior half. Cash was $34.1million as at December 31 2019, and the company’s debt facility of $30 million was undrawn.