Kogan Tanks Further As Questions Raised About There Inability to Sell Stock
The Kogan share price is down a further 3% to $3.79 today (Monday) with the future looking bleak for investors who bought when the stock that climbed during COVID lockdowns.
Credit Suisse told investors earlier today that they were downgrading Kogan’s shares to an underperform rating and slashing its price target by almost a third to $3.75 which is bad news for the online business whose share price has been hammered over the last two trading sessions.
Last week Kogan reported an 11% fall in gross profit for the quarter as sales fell by 3.8% to just $262 million.
The Kogan share price fell by more than 13% on Friday and is now down more than 50% for the year.
The Company claims that they have an abundance of stock in their warehouses, however analysts are mystified as to why the stock is not shifting out of their warehouses, when most retailers are facing major problems getting stock out of China.
The company said at the start of the year it had geared up with additional stock in anticipation that stock was set to be a key factor, the only problem for Kogan is that consumers are moving back to mass retailers whose brand they trust.
Kogan in the past has been fined several times by the Australian Competition and Consumer Commission for false and misleading trading.
At the start of COVID the Federal Court ordered Kogan Australia Pty Ltd (Kogan) to pay a penalty of $350,000 for making false or misleading representations about a tax time sales promotion, in breach of Australian Consumer Law.
Kogan has been fined several times by the Australian Competition & Consumer Commission for questionable trading practices.
Back in 2016 Kogan paid penalties totalling $32,400 after the ACCC issued infringement notices after an investigation into false or misleading representations about the price of three computer monitors advertised by Kogan during a Fathers’ Day promotion.
In comparison online web site MyDeal, did not report similar slowdowns in sales over the quarter, with MyDeal’s revenue nearly doubling for the period.