Reporting Season

No growth but unwinding inventories pumps Kogan shares 30% higher

Thu 28 Jul 22, 12:00pm (AEST)
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Key Points

  • Kogan expects to deliver flat FY22 revenue growth, while earnings are poised to fall -69%
  • Inventories have fallen substantially, from $227.9m at the end of FY21 to $161.m
  • Kogan shares are still down -52% year-to-date and -83% away from all-time highs

Kogan (ASX:KGN) shares have snapped a longstanding tradition of freefalling after a business update, opening 7% higher as the market opened.

A frenzy of buying activity has pushed the stock 37% higher at 11:30 am AEST, with current volumes sitting at 2.7m compared to its 20-day average of about 800,000.

At face value, Kogan announced a rather muted fourth quarter and full-year FY22 update.

Full year

FY22

FY21

% change

Gross sales ($m)

1,180

1,179

-0.1%

Gross profit ($m)

184.6

203.7

-9.4%

Adjusted EBITDA ($m)

19.1

61.8

-69.0%

Table: Market Index | Source: Kogan

 

Perhaps what was most encouraging, was the "significant unwinding" of inventories from $227.9m at the end of FY21 to now, $161.1m.

Even after a near 40% rerate, Kogan shares are still down -52% year-to-date and -83% away from October 2020 all-time highs.

The curse is broken

Since the beginning of 2021, Kogan had a ritual of purging its valuation every few months with poor business and/or financial updates.

2021

  • 29 Jan: Business update (-8.5%)

  • 26 Feb: 1H21 results (-10.4%)

  • 23 Apr: Business Update (-14.3%)

  • 21 May: Business Update (-14.6%)

  • 21 July: Business Update (-1.5%)

  • 24 Aug: FY21 results (-15.5%)

  • 20 Oct: Business Update (+6.7%)

  • 25 Nov: Annual General Meeting (-4.3%)

2022

  • 27 Jan: Business update (-12.3%)

  • 25 Feb: 1H21 results (-6.2%)

  • 29 Apr: Business update (-13.9%)

  • 28 Jul: Business update (+39.6%)

Excluding today's move, the average decline was -8.6%. Now it's improved to -4.6%.

Kogan.com Ltd (ASX KGN) Share Price chart
Kogan 12-month share price chart

 

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Written By

Kerry Sun

Finance Writer & Social Media

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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