The ASX Index has been buoyed by Booktopia's share price growth. But after a strong open, others on the E-Com Index are already struggling.
The ASX Listed E-Com Index has outperformed the ASX200 this week, driven largely by Booktopia’s share price increase. The ASXS200 shed 0.2% over the last seven days, compared to the E-Com Index which is up 3.9%. The Index leader in this timeframe is Booktopia, up 45.5% to $0.32 at close of ASX on Monday.
Booktopia’s performance flies in the face of those who seemed intent on pitching the pureplay retailer as the villain of the industry. Its mediocre ASX performance in recent times by no means makes it an anomaly. In fact, along with some of its peers / competitors, it is taking major steps to work towards growth in the current volatile landscape. Back in May, Founder Tony Nash announced he would be stepping aside. “The Board decided that having me and a new CEO as part of the Executive Leadership Team in the organisation puts us in a much more resilient position. It addresses succession planning considerations and many other opportunities,” he told Power Retail. While the company hasn’t hit the same share price value it was before its Q3 and CEO-related announcements, the ‘shock’ has dissipated, with investors seeming to be on board with its long-term growth plan. Whether its share price continues in an upwards trajectory after full-year results announcements seems unlikely given the brutal response we’ve seen in the past (and Booktopia is by no means alone here, we’ve seen this across the e-com and tech industry as a whole). However, its current growth, and the fact that it is actually carrying the E-Com Index this week, is encouraging.
Source: ASX Listed E-Com Index based on ASX reporting for the period
Kogan, Adore Beauty and Temple & Webster are also up in the last week, Temple & Webster, the biggest share price growth of the three, up 6.6% to $3.56. Adore is up 1.9% to $1.07 with Kogan up 2% to $3.00 at close yesterday. Kogan’s share price has, however, been fluctuating. At time of writing, it had already dropped to $2.71, meaning its recent gains may have been short-lived. There have been no announcements that would explain this noticeable drop, though it may be in anticipation of FY22 results. Temple & Webster has experienced a similar dip. At time of writing, it had dropped to $3.08 (from $3.56 at open). Adore Beauty is also failing to maintain its edge, dropping to $1.03 by lunchtime on Tuesday.
Cettire closed at $0.39 on Monday, marking 0% over seven days (albeit -18.9% over the last fortnight). Like its counterparts, it also seems to be trending downwards today, currently at $0.36. Redbubble, also steady at -0.5% over the last week to $0.94, was also down by lunchtime today, at $0.91 at time of publication. While E-Com was initially looking strong at open, it looks like the next few days might turn things on their head.
With Booktopia is the best performer during the last fortnight, up 68.4% who was the worst performer? BikeExchange is down 44.4% over the last fourteen days (-13.8% over seven days). Much of this is related to shedding after an inexplicable growth in its share price in late June, which even triggered questions from ASX compliance. In answer, BikeExchange pointed to its recently appointed new director and completion of the entitlement offer announced 21 June, though this seems an unlikely impetus for the recent trading in securities. It has now dropped from its peak of $0.045 to $0.025, meaning the sudden upwards change in share price value seemed to be a short term response to….something (nothing?)….rather than a sign of renewed confidence in the company.
MyDeal today released its Full Year 2022 results, highlighting Gross Sales of $272.2 million, ahead of guidance and up 24.8% on previous corresponding period (pcp) as well as record Active Customers, (up 17.6% on pcp to 1,051,701), Revenue of $65.4 million, up 70.9% on pcp, In-stock Gross Sales of $35.0 million, up 296.8% on pcp and strong cash balance of $32.4 million as at 30 June 2022. Its Q4 Scheme Implementation Agreement with Woolworths Group Limited is on track. It is because of this implementation scheme that we don’t expect too much share price movement post its results announcement (in contrast to what we will see as more e-commerce companies begin to release their results). MyDeal is currently at $1.03, where it has been hovering since the Woolworths announcement in late May.
The next few months will no doubt be brutal, with interest rate hikes, inflation and the pandemic continuing to cause havoc, combined with FY22 results announcements. As we’ve seen in the last 12 hours alone, the speed at which ASX performance can change is monumental. The question, as always, is which companies can withstand this volatility and come out the other side all the stronger for it.
Figures are current as at close of ASX on 11 July 2022. This is analysis only and not intended as investment advice.
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