It’s been a big day for retail stocks with Harvey Norman, Premier Investments and Wesfarmers climbing steadily, whereas Kogan slumped sharply. Ironically, JB Hi-Fi is up 70% for the year.
Days after it announced it will be folding up its loss-making ecommerce Catch business, Wesfarmers’s share price climbed more than 3% by midday on Friday. It’s also been revealed that the owners of Bunnings, Officeworks, Target and Kmart refused to sell Catch to Kogan.
Wesfarmers’ share price is now only about 1% below its record high close of $74.98.
It comes as Goldman Sachs upgraded Wesfarmers to Buy with a $78.70 price target versus Thursday’s close at $72.32.
GS analyst Lisa Deng recommends a ‘Buy’ for Wesfarmers.
Deng downgraded Harvey Norman to a ‘sell’ describing them as a “growth laggard”.
Despite this dire warning, Harvey’s share price defied that assessment to trade 3% higher at $5.00.
Harvey Norman reported a 1.7% rise in aggregated sales for the quarter ending October 2024. Between 1 July 2024 to 31 October 2024, Australian franchisees’ sales increased 3.2% but shrunk 8.6% in New Zealand where JB Hi-Fi is gaining share.
Recently the Company opened 5,295 square meter store in the UK’s West Midlands with a second store in the UK set to open shortly as part of their International expansion.
Premier Investments whose share price is up nearly 5% today after a general meeting of its shareholders approved a deal with Myer, with 99% of its shareholders voting in favour of a capital reduction and performance rights resolutions for Myer’s acquisition of Premier’s Apparel Brands.
95.47% of Myer’s shareholders voted in favour of the combination. Myer’s share price has climbed more than 16% in the last five days to close to $1.
Kogan.com meanwhile fell sharply to below 13% on Friday even though the online retailer posted revenue growth of 9.9% to $492.5 million in the first half of the 2025 financial year.
Gross profit grew 18.3% to $106 million and adjusted EBITDA rose 21.2% to $19 million.
Analysts believe that Kogan missed market expectations with their latest financial results which took into account the busiest period of the year.
Citi analyst James Wang said the update represented a 7 per cent miss at the adjusted earnings level
Speaking to the AFR, Wang said, “The key negative for us is the decline in adjusted EBITDA during the Black Friday and Christmas sales period. Revenue grew but EBITDA fell.”
“What may have happened was that the company drove a high level of traffic during this period to perhaps attract more First (scheme) sign-ups which may have resulted in a higher marketing bill.
“There were no details around Kogan First revenue and subscriber growth.”
As ChannelNews reported earlier today, Ruslan Kogan says his company “reached out to Wesfarmers multiple times to try and acquire and rescue Catch”, but that “they chose to shut it down”.
“It’s bittersweet to hear that Wesfarmers is shutting down Catch,” Kogan wrote on LinkedIn.
“On one hand, we both launched in 2006 and they have been our closest competitor with the biggest overlap for nearly two decades. On the other, it’s sad to see the end of an iconic and loved Australian brand that helped pioneer Aussie ecommerce.
“We reached out to Wesfarmers multiple times to try and acquire and rescue Catch which would have been a better outcome for all stakeholders – we know how to make an ecommerce business like that thrive in a sustainable way. It’s a shame they chose to shut it down.”