Major Australian online retailers are surviving but not necessarily thriving in the current financial conditions. A report today suggests three of the best known online stores have positive net cash positions but first half-year results show challenges ahead.
Either the glow of increased sales during the pandemic when consumers were in lockdown will continue. Or decreased sales will erode their financial positions now that customers are back shopping in bricks-and-mortar retail outlets. Maybe it’s a case of being brought down to earth by the current economic reality.
The Australian’s Dataroom today lists electronics and appliance retailer Kogan, homeware outlet Temple & Webster and cosmetics and skincare provider Adore Beauty as three online businesses doing okay with net cash positions of $74 million, $5.6 million and $1.7 million respectively.
However the three have reported big drops in revenue in the first half of 2023.
Temple & Webster
Kogan reported a drop of 34 percent in revenue in the first half of 2023, compared to H1/2022. It achieved a net loss of $23.8 million, an increase of 101 percent from H1/2022.
Temple & Webster’s performance also wasn’t that inspiring. Its profit after tax in the first half of 2023 was down 46.7 percent, from $7.2 million to $3.9 million, with revenue dropping $28.3 million year-on-year. It attributed its poorer financial performance to Covid-19 lockdowns, but it said revenue was finally trending upwards.
“Although the half was down 12% year on year, importantly, revenue trended in a positive direction throughout the half as comparisons normalised with Dec-22 being positive in terms of year-on-year revenue growth,” Temple & Webster said.
Adore Beauty’s previous financials were cause for great optimism. Consumers still wanted to look beautiful even in bleaker financial times and at home in lockdown. Its 2022 financial statement reported record revenue, multiple record trade days and strong growth. That glow seemed to continue post-COVID.
Adore Beauty
“Trading conditions in FY22 were a tale of two halves – the first of which included several months of lockdown for most of the country, delivering significant new customer growth and elevated returning customer spend,” the report said.
“The second half saw us transition out of lockdown to a re‑opened, more competitive, and inflationary environment. While growth returned to more sustainable levels, encouragingly customer numbers remain above pre‑COVID‑19 levels, and we are growing off this elevated base.”
That wasn’t the case in the first half of 2023 with revenue dropping 17 percent year-on-year and a net loss. In H1/2022 it reported a $1.79 million profit. In H1/2023 it attained a $90,000 loss.
The three have a challenging year ahead in the current economic climate.
