Kogan has released its Q3 results, sales have continued to decline, but the company has returned to underlying profitability as it remains on track reducing its excess inventory.
Kogan has had a rough period following the lasting impact of lockdown related overstocking. Today, the company has revealed a silver lining in that it has returned to underlying profitability despite a 28 percent drop in sales and a disappointing profit.
Gross profit for the quarter sits at $34.3 million, a decline from last year’s $41 million, which the company attributes to soft topline performance. Gross sales for the quarter declined 28 percent YoY, at $188.7 million, which Kogan says was impacted by soft market conditions caused by interest rate rises and inflationary pressure. The first half results released in January paint a similar picture, with gross sales for the half already dropping 32.5 percent YoY.
Despite the declining sales, Kogan has revealed the company has returned to underlying profitability with founder and CEO Ruslan Kogan highlighting this achievement.
“After a series of challenging periods, I’m proud that Kogan.com has returned to sustained underlying profitability, reflecting the efforts of our brilliant team and the agile and robust business we have built,” he said.
“The journey to get here has been one of the toughest in our 17 year history, but also one of our most rewarding. It goes without saying – we are a far stronger Company today than ever.
The trading update announces that inventories reduced to $78.3 million (comprising $68.2 million in-warehouse and $10.1 million in-transit) as at 31 March 2023 from $193.9 million (comprising $169.5 million in-warehouse and $24.4 million in-transit) as at 31 March 2022.
Another silver lining for the company, its Kogan First loyalty program subscribers has gown by 24.3 percent to over 407,000 as at 31 March 2023.
Kogan concluded, “in these current tough economic conditions, we are a proven and loved shopping destination that helps millions of shoppers save on products and essential services. We are dedicated to helping our customers live life to the fullest.”
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