Kogan.com founder Ruslan Kogan says the online retailer is in a strong position to help millions of cash-strapped shoppers with everyday essentials, despite the company’s sales sliding by more than 20 per cent in the second half of 2023.
Shares in the ASX-listed retail platform advanced by close to 10 per cent during Wednesday’s session after the company told investors it had managed to reduce the value of its inventories by close to 60 per cent since June 30, 2022.
The company has been working to unwind inventories over the past year since admitting to overinvesting in stock during the throes of the pandemic, only for the lockdown-fuelled e-commerce boom to end.
Ruslan Kogan said the group’s focus on driving efficiencies within the business meant the company was “more agile than ever” as cost pressures hit households.
“We know millions of customers are struggling with cost of living pressures, and we’ve been able to
recalibrate our business to better support them in these times. Our focus on making the most in-
demand products and services more affordable and accessible has never been more important,” he said.
“The value millions of customers get from shopping with the Kogan.com Group is precisely why we exist, and we’re pleased to be in a position of strength and stability to best help them.”
However, unaudited financial results released as part of the company’s trading update point to softening spending conditions as mortgage repayments climb.
Kogan.com’s gross sales declined by 22.5 per cent for the six months to June 30, coming in at $373.7 million, while the company’s total group sales for the 2023 financial year look set to decline by 28.4 per cent to $844.8 billion.
The company’s adjusted earnings before interest and tax shows a loss of $9.7 million. Despite this, the retailer highlighted that underlying profitability had been improving in the second half of the year amid the focus on reducing inventory and cutting costs.
Australian consumer price index data released on Wednesday showed inflation rose by just 0.8 per cent in the June quarter, the lowest rise since September 2021.
Annual inflation is still sitting at 6 per cent, however, while food is still 7.5 per cent more expensive compared with the June quarter of 2022.
Spending data from ANZ released this week, which includes card and merchant facility data, suggests overall spending declined by 10.3 per cent for the first 22 days of July compared with the same time last year.
Non-food retail sales were down by 11 per cent, while travel spending was down by 17 per cent.
“Consumer confidence is subdued, and the ANZ-Roy Morgan ‘time to buy a major household item’ subindex is near record lows,” the bank said in a note.
Kogan.com shares were up 5.3 per cent to $6.13 in early afternoon trading.
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Source: Thanks smh.com