Online retailer Kogan says consumer demand did not meet its expectations amid challenging market conditions during the third quarter, resulting in an increased inventory after a decline in sales.
In a trading update, the business said its gross sales fell 3.8 per cent to $262.1 million with Kogan Marketplace contributing $78 million in this quarter. Adjusted EBITDA was recorded at $800,000 while gross profit declined 11.2 per cent to $41 million. However, Kogan said its compound annual growth rate in gross sales since the third quarter of the 2020 fiscal year remains strong at 19.4 per cent.
The company’s active customer base has increased by 3.6 per cent to 4.099 million and the number of Kogan First loyalty program members grew 264 per cent to 328,000 (it has since surpassed 345,000).
Founder and CEO Ruslan Kogan said the company’s growth through the third quarter was supported by the rapid expansion of the Kogan First membership.
“Our current focus is aimed at returning the company to its historical margins and to position the business for its next phase of growth,” he said.
The enterprise believes the moderation in sales in this quarter is a result of slow e-commerce activity in Australia as well as unfavourable general market factors.
Kogan’s portfolio of businesses includes Kogan Retail, Kogan Marketplace, Kogan Mobile, Kogan Internet, Kogan Insurance, Kogan Travel, Kogan Money, Kogan Cars, Dick Smith, Matt Blatt and, in New Zealand, Mighty Ape.