STOCK WATCH: E-Com Shares Recalibrate After Post-Earnings Slump

After what has been a rollercoaster few weeks on the ASX, E-Com shares look to be finding some kind of equilibrium. In the last seven days, the E-Com Index is up 1.1%, outperforming the ASX200 which shed 2.5% in the same period.

Temple & Webster is up 4.4% to $5.20, with Bike Exchange the best performer in the last week, up 10% to $0.022. Redbubble is in close second, up 9.7% to $0.79 at close of ASX on Tuesday.

Cettire and Booktopia are the outliers here, with double digit losses. Booktopia is the worst performer on the E-Com Index, down 15.8% and Cettire is down 11.8% in the last week. Over 62,809,555 Cettire shares held by Founder and CEO Dean Mintz came out of voluntary escrow resulting in a decrease in deemed relevant interest in the shares. The company has repeatedly said Mintz has no current intention to sell or dispose of his shares. We shall see.

Booktopia is still feeling the effects of a ‘challenging’ year, with FY results impacted by restructuring costs and the ACCC penalty (amongst other things). Redundancies and the removal of former CEO Tony Nash cost the business $1.3 million.

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

Adore Beauty shares are -3.1% over seven days to $1.56 at close of ASX yesterday, with Kogan steady at 0.9%. Both Kogan and Adore shares tanked after FY22 results were released. In fact, BikeExchange, Temple & Webster and Redbubble shares also tanked after their earnings announcements. Booktopia was the only E-Com company to buck this trend. Its share price initially went up post-earnings announcement, and then tanked. It may only be a week or two later, but we can see that in most cases, there seems to be some level of recalibration rather than a continued spiral. This is despite the RBA rate rise on Tuesday afternoon.

It’s likely we haven’t felt the full impact of the rate rise, and that this time next week, Stock Watch will look a little different. But with Christmas spend poised to come early this year (spoiler: it’s already started), and online retailers strategising for a massive few months, perhaps investors are more likely to hold than abandon ship. E-Commerce companies have already learnt from the last few years, and if the FY22 presentations are anything to go by, they’re running leaner and tighter than ever before. The hits will likely keep coming for the e-com and tech sector, but with moments of reprieve to take catch a breath.

Figures are current as at close of ASX on 6 September 2022. This is analysis only and not intended as investment advice.

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