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The Kogan (ASX:KGN) share price has gone NUTS on Q4

The Kogan.com Ltd (ASX: KGN) share price has gone completely bananas. It’s up over 40% after giving a FY22 update.

Kogan is one of Australia’s largest e-commerce businesses. It’s quite a bit larger after today.

Kogan FY22 update

The ASX retail share outlined to investors how it had performed for the 12 months to 30 June 2022. Here are some of those numbers compared to FY21:

  • Gross sales increased by 0.1% to $1.18 billion
  • Gros profit fell by 9.4% to $184.6 million
  • Adjusted EBITDA dropped 69% to $19.1 million
  • Active customers ended at 3.97 million
  • Kogan First members surged 210% to 372,000
  • It ended with net cash of $31.2 million
  • Ending inventory of $161.1 million, down from $227.9 million in FY21

The company said it was pleased to announce another year of record gross sales and a return to positive quarterly adjusted EBITDA in the fourth quarter of FY22 after the “successful ongoing recalibration of operating costs.”

Management comments

I thought Kogan CEO and founder Ruslan Kogan had plenty to say, so I think it’s worthwhile to relay those interesting comments:

Times are changing. In uncertain times, people don’t want to alter their lifestyle but they are happy to shift the way they shop. We know that in an environment where great value becomes even more important, Kogan.com serves an important need.

Our business was built for this. Efficiency and speed has been at the core of how the Kogan.com team operates for 16 years now. We’re honoured that there are millions of active customers in the group that have seen the value we provide. When the Australian public was asked to vote for their favourite online retailer, Kogan.com was voted the Australia Post OARIAS People’s Choice Retailer of the Year for the sixth year in a row. This is perfect validation of the value we create for the people that matter most – our customers.

We’re not resting on our laurels though. We are making the business leaner to enable us to pass on cost efficiencies to customers in the form of lower prices. A leaner company means we discontinue parts of the business that are not delivering value or shareholders, and also gives us the flexibility to respond to significant ongoing changes in the macro environment.

Final thoughts on the Kogan share price

I’m not surprised to see that the Kogan share price has soared in response to returning to profitability.

The FY22 third quarter showed a decline in gross sales and reflected negative EBITDA. But this was improved.

It’ll be interesting to see how FY23 goes. If Kogan can keep making profitable sales, then that’s good news and this could help the Kogan share price rise in the longer term.

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