Date : 29/01/2021

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

Kogan share price continued to be beaten down today despite the firm posting good sales numbers in its half year financial update. The firm enjoyed a record half year in gross sales and gross profit. Black Friday and Boxing Day sales boosted the company’s numbers. Kogan 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 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 the firm 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 share price taking a bit of a beating. However, prior to this, the ASX and Kogan had been experiencing selling pressure as it looked to be one of those weeks where 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 Share Price, the stock trades at its lowest price in over a month.

Looking for Growth Stocks?

Growth stocks are potentially one of the hardest to pick as there are a lot of factors that need to be considered – from industry tailwinds to financial health of the individual stocks, and a lot of little things in between them. Shares in Value research team have picked their top 3 ASX stocks to buy in 2021. Click here to download the report for free.

Scroll to Top