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Date : 29/01/2021

Kogan (ASX:KGN) Fails Irrespective of Half-Year Record Sales

Kogan shares continued to be beaten down today despite the firm posting good sales numbers in its half year financial update. In the latest Kogan news, the firm enjoyed a record half year in gross sales and gross profit. Black Friday and Boxing Day sales boosted the company’s numbers. KGN reported that 7 of their top 10 trading days came during the Black Friday period, as the week’s sales topped $50 million.

The acquisition of New Zealand’s business Mighty Ape has also brought in a lot of sales volumes for Kogan. Kogan and Mighty Ape combined have seen a 96% growth in sales for the first half of FY2021. However, despite these positive numbers, the Kogan share price continued to come under pressure just as the broader ASX market indices did.

Kogan Shares Face Challenges After the Acquisition

Kogan experienced challenges fulfilling orders as demand soared faster than they expected. It takes time to successfully integrate an acquisition and this looks to be a case where the growth came too quickly for KGN to handle. Supply chain and warehousing is a challenge in periods during extreme growth periods and it looks to have resulted in close to $2 million in additional charges.

These challenges resulted in Kogan shares taking a bit of a beating as ASX: KGN fails irrespective of half-year record sales. However, prior to this, the ASX charts and ASX: KGN had been experiencing selling pressure as it looked to be one of those weeks where Kogan stock investors are saying “risk-off”. Retail stocks soared since December and some of the top retail stocks of 2021 have performed well with industry tailwinds. With the recent 12% plunge in Kogan shares, the ASX: KGN stock trades at its lowest price in over a month.

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