Online marketplace Kogan will deliver its fifth year of consecutive sales growth as active customers soared 46 per cent to over 3 million in the year to June 30, according to unaudited figures released on Wednesday.
According to the business, gross sales were up 52 per cent to $1.17 billion and EBITDA 23 per cent to $61.1 million for the year despite an unforeseen decrease in expected demand.
“The company took the view late last year that the levels of demand during the first half of FY21 would likely continue into the second half, and potentially grow further still, [and] invested in inventory and operational capacity to be able to fulfil that growth,” the business said in a statement to shareholders.
“As is now clear, the company’s expectations weren’t accurate and as a result [we] purchased too much stock.”
Kogan was forced to focus on promotional activity during the second half in order to clear out its excess inventory, which, combined with a higher cost of warehousing to store this inventory, led to the business’ second half being “impacted”. Total inventory costs for the year hit $228.1 million.
“We can now say our efforts to bring down levels of inventory have come a very long way [and we expect] improved efficiency moving forward,” Kogan said.