Kogan revenue and gross sales decline; CEO 'contented' despite financial perform...

Wednesday, 23 August 2023 11:19

Kogan revenue and gross sales decline; CEO 'contented' despite financial performance

Online retailer Kogan's gross sales and revenue took a dip from $1.8 billion and $718.5 million in FY22 to $844.4 million and $489.5 million, recording a drop of 28.4% and 31.9% respectively, as a result of soft trading conditions brought on by cost-of-living pressures and interest rate rises throughout the year.

While the company's earnings may have softened from market trading conditions and inventory realignment, Kogan was able to reduce excess stocks, reducing its inventories by 57% to $68.2 million by the end of the financial year. It noted that its inventory levels "were now aligned to the current levels of demand."

According to reports, Kogan encountered overstocking problems in April 2021, bogged by excessive intentory and slower sales, that affected Kogan's growth.

The problem continued to persist until Kogan CEO Ruslan Kogan declared "the ship has steaded" in February this year as the company's half-year losses, according to Startup Daily.

However, Kogan's active customers dwindled. For FY23, it recorded a total of 2,945,000 customers comprised of 2,190,000 for Kogan, and 755,000 for Mighty Ape. According to a Sharecafe report, it signified a loss of over a one million active customers over the 12-month period.

Offsetting this decline, Kogan First subscribers grew by 7.8% to exceed 401,000.

Despite the dip in revenue, CEO Ruslan Kogan is contented with the company's performance, noting that Kogan's platform-based sales emerged as the largest contributor to both sales and profits.

Kogan Marketplace, verticals, and other advertising income contributed sales and eliminated the need for inventory holding.

“FY23 marked a significant milestone in the history of our Business. For the first time ever, Kogan.com’s platform-based sales contributed the majority of our gross sales and gross profit. Importantly this has enabled us to deliver better quality earnings as we successfully transitioned into a higher margin, lower risk, platform and software based business while offering our customers increased competition and improved value," Ruslan Kogan said.

“We have set ourselves up for success in FY24 and beyond, and in doing so, we have ensured we’re in the best position possible to deliver exceptional value products and services to millions of customers.”

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