Home > Latest News > Kogan Losses Double To $28.3M, Revenue Down 34%

Kogan Losses Double To $28.3M, Revenue Down 34%

Kogan has posted a $28.3 million loss during the first half of FY23, although the struggling retailer insists it is profitable again.

Revenue for the six months to the end of December was down 34.3 per cent, to $275.6 million.

Gross sales were down 32.5 per cent, from $698 million in the prior corresponding period, to $471.1 million.

Gross profit crashed 41.8 per cent to $62.9 million, before a slew of losses saw Kogan post a pre-tax loss of $31.94 million, and a statutory loss after tax of $23.8 million.

“Profitability during the half was significantly impacted by the sell‑through of excess inventory in order to substantially right‑size inventory levels, which impacted gross margin and marketing costs,” Kogan explains.

There was also a non‑cash equity‑based compensation expense of $13.6 million driven by the award of options after the Company’s AGM in November 2020, provision of $4 million “for the likely payment of Tranche 4 of the Mighty Ape purchase price”, and a further $300,000 in realised and unrealised losses.

“These items are not considered by the Company to be representative of the underlying performance of the Business,” the financials, read, “and as such consider the Adjusted Loss After Tax of $9.6 million a useful metric of underlying performance.”

The below financial table is also a useful metric.

While a period of “unprecedented discounting” may have killed profits for the first half of the financial year, Kogan claims it returned to profitability in January, recording its first positive (adjusted) EBITDA month (of $15. million) since July 2022.

Inventories have been “right-sized” from $159.9 million on June 30 to $98.3 million as of December 31.

However, gross January sales of $68.8 million remain down 33.2 per cent year-on-year, and the gross margin is only up 7.9 per cent despite “the reduction of excess inventory sold with heavy discounting” in the previous period.

Operating costs are down 22.1 per cent this January, which is one bright spot, and the adjusted EBITDA of $1.5 million, is a lot better than the $600,000 loss in January 2022.

Ruslan Kogan insists “the ship has steadied”.

“We’re pleased to be emerging from a turbulent few years,” said Kogan.

“The ship has steadied, we have a renewed focus on the ruthless efficiency that’s underpinned our entire existence, and we have doubled down on delivering great value for customers.

“We look forward to the second half of this financial year with confidence. We have reset Kogan.com for success, and in doing so, have ensured we continue to delight our millions of Customers during these challenging times.”

Shares are down a modest 1.75 per cent today, as of 10:45am, however have crashed by more than 25 per cent over the past month.

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