STOCK WATCH: E-Com Growth Streak Continues

Last week we wrote about how Kogan’s shares soared in response to its FY22 business update, jumping to $4.70 up from $3.13 prior to the update. ‘Will its share price trajectory continue?’ we asked in the last Stock Watch. ‘It is unlikely that this time next week, we will be reporting double-digit growth in the shorter term,’ we predicted. And indeed, Kogan is now down 2.1% over the last seven days, to $4.23. While it may have peaked at $4.70 and gradually dropped to $4.05 on Friday, the growth on Monday shows that its downwards trend may have come to an end.

It wasn’t just Kogan that experienced uplift yesterday. Redbubble jumped from $1.14 on Friday to $1.33 on Monday. Over the last seven days, it experienced 15.7% growth. Adore Beauty is also up, from $1.48 on Friday to $1.50 on Monday, with 3.8% growth in the last week. Cettire closed at $0.69 on Monday, an impressive 22.1% growth in the last week. Booktopia is also up from $0.29 to $0.32 at close of ASX on Monday, after it announced it would be opening a new customer fulfilment centre in Sydney’s west to drive further online growth.

‘A number of years of high growth during COVID and an increase in inventory to meet the demands of our customers has led to constant retrofitting on our Lidcombe facility to a point that it is now a constraint on our growth and efficiency,’ the business said in an ASX update.

The new 20,000 sqm centre is expected to be completed by the Christmas period in 2023. Booktopia is currently finalising its financial package to support the $14 million investment in new equipment – these are expected to roll out in FY23 and FY24. This new FC will include picking robotics, ‘future-proof’ designs to support automation, and a ‘custom-designed’ layout to improve efficiency and reduce manual handling.

‘We continue to see opportunities for growth in the Australian book market, and investment in a new customer fulfilment centre is not only critical to business performance but also to ensure Booktopia is able to meet its customer promise now and into the future,’ said Acting CEO, Geoff Stalley. ‘The new CFC re-shapes our supply chain and unlocks a significant opportunity to increase profitability and generate cash with a purpose-built design that is efficient and scalable.’

In the last seven days, Booktopia shares have experienced 1.6% growth, which is encouraging after a period of dramatic reactivity on the ASX following founder Tony Nash stepping down from his role as CEO in May before being ousted from the board in July. With the focus on growth and expansion, this may signal a change in investor sentiment, although we may not see a full recovery until a replacement CEO is announced.

Source: ASX Listed E-Com Index based on ASX reporting for the period

While Booktopia and Kogan’s gains can be attributed to recent announcements, it seems uplift elsewhere is related to the growth of e-com and the tech sector generally, or investors getting in before further full year announcements later in the month (with the potential for further gains).

Not all companies experienced growth on the ASX however, Temple & Webster is down 2.4% over the last seven days, to $4.57. Bike Exchange is stagnant at $0.022.

Overall, the ASX E-Commerce Index experienced 1.3% growth over the last week, outperforming the ASX200 which is up 0.4% in the same period.

Figures are current as at close of ASX on 8 August 2022. This is analysis only and not intended as investment advice.

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