Kogan has reported record-breaking results for FY21, surpassing $1 billion in Gross Sales for the first time.
Kogan has exceeded $1 billion in Gross Sales for the first time, outperforming key metrics in FY21, with strong revenue growth, increasing by 56.8 percent, reaching $780.7 million.
Additionally, its Gross Profit has lifted by 61 percent to $203.7 million. For Ruslan Kogan, the CEO and Founder of Kogan, the retailer is only scratching the surface of its potential. “Even though we just celebrated our 15th birthday, we feel like we’re just getting started,” said Kogan.
Gross Sales growth in July 2021 is 5.1 percent above the previous year, and while Gross Margin showed some improvement in June 2021, it is below the previous year. The first half of August has shown further improvements, with ‘strong acceleration’ above July 2021; Gross Sales are now 24.5 percent above July 2021, and Gross Profit also increased by 25 percent.
The retailer was facing ‘volatile’ and dynamic trading conditions with the pandemic, and there was no increase in consumer demand. This led to a higher level of inventory in the second half of FY21 – to address this, the retailer will further invest heavily in its marketing and promotional activity to support inventory rebalancing.
As such, free traffic represents more than 66 percent of all traffic. “Why would you go back to battling parking lots and crowds?” said Kogan to investors.
Kogan Marketplace was a “standout performer in FY21,” said Kogan. Kogan Marketplace’s Gross Sales increased by 91 percent YoY, and while it’s still in its ‘early days’, it will create ‘huge benefits’ to its consumers and investors, the CEO said. In June 2021, Kogan launched its marketplace platform into the New Zealand market.
Kogan has increased its Active Customer base by 46.9 percent in the last 12 months, growing to 3.2 million. Similarly, its acquired NZ platform, Mighty Ape, also saw an increase to 764,000 active customers. Moving forward, the retailer plans to strategically increase its marketing activities to continue this upward trajectory of the Active Customer base.
An immediate investment will be made to further expand its customer base, driven primarily by the Kogan First membership. Its loyalty program increased to over 120,000 members as of June 30. “Kogan First is more than just free shipping,” said Kogan of the loyalty program. Kogan First members received an average of $105 in benefits in FY21, with revenue increasing to $8.9 million.
“It is the most incredible loyalty program in the country,” Kogan told the callers. “There is no better loyalty program out there.”
Member benefits increased to $12.7 million in FY21. Looking to the future, Kogan plans to hit one million Kogan First members as part of its medium-term goals and will further invest in member benefits to reach this milestone.
The retailer explained that Australian e-commerce is ‘in its infancy’. For the next 12 months, Kogan plans to grow its Kogan First membership programs, expand its exclusive brands and invest further in its Marketplace platform. Kogan will also be conserving cash for further business investments and growth purposes. It has also paused dividends and will not declare an FY21 final Dividend – this is not intended to be an indefinite move.
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