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Kogan.com (ASX:KGN) - Founder and CEO, Ruslan Kogan
Founder and CEO, Ruslan Kogan
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  • Kogan.com (KGN) trades green on the ASX today following a business update ahead of its official annual financial report
  • Gross sales, revenue, profits and earnings all improved over the 2021 financial year compared with the two previous financial years
  • Kogan Founder and CEO Ruslan Kogan says the company is proud to have delivered five consecutive years of significant growth in sales and earnings
  • While an unpredictable trading environment led to Kogan purchasing too much stock earlier this year, the company says inventory levels have since improved
  • Shares in Kogan.com are trading 0.85 per cent higher at $11.83 each at 11:53 am AEST

Online retailer Kogan.com (KGN) is trading higher on the ASX today following a business update ahead of its official annual financial report.

The company revealed growth in sales, revenue, profits and earnings over the 2021 financial year compared with both the 2020 financial year and the 2019 financial year, before COVID-19 impacted global economies.

Kogan’s gross sales grew by 42.1 per cent from last year to roughly $1.1 billion. For reference, FY19’s gross sales were $552 million and FY20’s gross sales were $772 million.

Similarly, revenue grew 40.7 per cent to $700 million in FY21 compared with the financial year before, while profit for the core Kogan business grew 45.3 per cent to just shy of $184 million.

Kogan’s earnings before interest, tax, depreciation and amortisation (EBITDA) improved, too, to land within company expectations.

In May, Kogan predicted adjusted EBITDA of between $58 million and $63 million for the financial year. Today, the company said thanks to the recent purchase of New Zealand online retail business Mighty Ape, total EBITDA for the year came in at $61.1 million.

Kogan Founder and CEO Ruslan Kogan said the company was proud to have delivered five consecutive years of significant growth in sales and earnings.

“More customers than ever are turning to Kogan.com for convenience, range and price,” Mr Kogan said.

“We are proud to have been able to service more than three million Australians during the challenging year behind us, all while expanding our warehousing operations, enhancing Kogan First membership rewards, and rolling out new exiting projects that will further improve delivery times and customer experience in the near future.”

Too much stock

Kogan told investors this morning that given the turbulent trading environment over the the past coronavirus-stricken year, company forecasting had been “harder than ever”.

As such, some of Kogan’s predictions made towards the end of last year missed the mark, resulting in the company over-purchasing stock.

Kogan had predicted that the high levels of demand it experienced during the first half of the 2021 financial year would continue well into the second half of the year and potentially grow even further still. As such, Kogan bought enough inventory to manage this level of demand.

As it turns out, demand did not quite meet company expectations and Kogan was left holding too much stock.

“This led the company to focus on strong promotions to bring inventory to the right level for the relative size of business, and this promotional activity combined with high warehousing costs has impacted financial performance in the second half,” Kogan management said.

Nevertheless, Kogan said its efforts to bring down its levels of inventory had come “a very long way” and stock was now approaching the right level for the business.

Shares in Kogan opened almost 5 per cent higher at $12.31 each this morning following the business update. The company has since pared back its win slightly but still trades 1.37 per cent higher at $11.83 per share at 10:53 am AEST.

KGN by the numbers
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