Kogan.com sales and profits are up 40% in a covid boom, but its shares are down after missing expectations

• Gross sales of $768.9 million, up 39.3% on FY19
• Revenue of $497.9 million, up 13.5%
• Gross profit of $126.5 million, up 39.6%
• Adjusted EBITDA of $49.7 million, up 57.6%
• NPAT of $26.8 million, up 55.9%
• Active Customer base of 2,183,000, up 35.7%
• Fully franked final dividend of 13.5 cents per share, up 64.6%
• Final dividend 2HFY19: 8.2 cents per share

Online retailer Kogan.com has seen sales jump nearly 40%, with net profit after tax up a whopping 55.9% to $26.8 million, but its share price has fallen by nearly 6% on the news after missing market expectations.

The e-commerce retailer, one of the major beneficiaries of the coronavirus pandemic, saw gross sales hit $768.9 million, up 39.3% on 12 months ago, as one of the major online retail. Revenue grew by 13.5% to $497.9 million compared to FY19.

NPAT climbed 55.9% to $26.8 million. Earnings before interest and tax (EBIT) was $39.1 million. Gross margin grew by 4.7% to 25.4%, delivering a gross profit of $126.5 million, up 39.6% , year-on-year (YoY). Adjusted EBITDA increased 57.6% to $49.7 million

But revenue, NPAT and EBIT missed market expectations of $512 million, $28.25 million and $40.8 million respectively.

Kogan now has more than 2.18 million active customers, a rise of 35.7% on 12 months ago.

Kogan.com’s FY20 results. Source: Kogan

Trade in the second half of the year reveals just how good coronavirus has been for business. Growth in gross sales, gross profit and adjusted EBITDA for 2HFY20 were up 62.5%, 68.3% and 74.1% respectively, YoY.

July sales from Kogan.com were up 110% on 12 months ago, with gross profit up 160% adjusted EBITDA of more than $10 million.

Kogan’s performance during the first six months of 2020.

At 30 June, the company had $146.7 million in cash and an undrawn bank debt facility of $30 million, which excludes the proceeds from July’s $20 million share purchase plan. Kogan.com raised $115 million in June’s share placement.

Founder & CEO Ruslan Kogan said the company was seeing a record number of first time customers, who make repeat purchases at a 40% faster pace than previously.

“For us this is a very exciting trend that shows that once customers learn about shopping online, they change their ongoing behaviour. Once someone discovers the benefits of online shopping, I struggle to see why they would ever go back to the old way of doing things,” he said.

“After almost 15 years of preparation, the revolution occurring in retail represents a significant opportunity for Kogan.com.  Kogan Marketplace was a standout performer during the year, exceeding all our expectations and providing our customers with more choice than ever. Importantly, the emergence of Kogan Marketplace has made Kogan.com even more scalable by enabling us to grow infinitely without a corresponding investment in inventory.”

Kogan’s third party marketplace launched in 2019 and gross sales jumped 70% to $100 million in the first six months of the 2020 calendar year.

Kogan currently trades at around 70 times its share price, compared to traditional retailers such as JB Hi-Fi at 16x.

The company’s portfolio has a range of brands that also includes Kogan Mobile, Kogan Internet, Kogan Insurance, Kogan Travel, Kogan Money, Kogan Cars, Kogan Energy, Dick Smith and Matt Blatt.

Kogan shares fell nearly 6% in early trade on Monday morning before recovering to be down around 4.4% at $20.87 at noon today.

Kogan’s FY2020 growth.