Kogan's (ASX:KGN) release of its pre-results update offered a mixed bag. While the company saw strong growth in some areas, weak consumer activity squeezed others, leading to a volatile day for its shares.
Initially, Kogan shares jumped 12% on the news. However, by 3:30 pm, they were down more than 3% compared to last Friday's closing price of $4.35. The stock hit a low of $4.15 after peaking at $4.90.
According to the ASX statement, Kogan faced challenges in the fourth quarter, particularly in its Mighty Ape and Marketplace segments.
Gross sales for the three months ended June 30th were $184.1 million, down 1.5% year-on-year. This reflects growth in Products (7.4%) and Verticals (6.4%), offset by declines in Marketplace (14.6%) and Mighty Ape (13.3%).
Despite the sales dip, quarterly revenue rose slightly (0.2%) to $75.9 million, and gross profit increased by 3.8% to $31.8 million. However, this growth is lower than previous quarters.
Adjusted EBITDA and EBIT saw more significant growth at 38.7% and 105.7%, respectively, but this is coming from a smaller base.
For the full year (ending June), sales were down 4.8% to $808.9 million. However, Kogan appears to have managed its margins effectively, with gross profit up 23.3% to $168.4 million and adjusted EBIT swinging from a $9.8 million loss to a $25 million profit.
Group active customers were 2.609 million as of June 30th (1.909 million for Kogan.com and 700,000 for Mighty Ape), down slightly from 2.660 million at the end of March. However, Kogan FIRST Subscribers grew from 472,000 to 502,000.
Intriguingly, the company announced it will no longer provide regular updates on customer numbers and subscribers, similar to Netflix. Additionally, they plan to change the frequency and content of their business updates. This shift may raise concerns among data-driven investors.
Founder and CEO Ruslan Kogan commented: "Cost of living pressures are driving customers to Kogan.com, and we're working hard to ensure significant savings. While Kogan FIRST Subscribers find value shopping online, they're also realizing they might be overpaying for essential services like phone plans, electricity, or NBN if not with Kogan.com.
"Having ended the financial year strong, our team is excited to carry this momentum into FY25. We remain committed to delivering exceptional value to our millions of customers every day."
While Kogan boasts strong profits, the mixed performance and changes to reporting metrics have caused the stock price to fluctuate. This volatility is likely to continue as investors grapple with the company's future prospects.
