The Kogan.com Ltd (ASX: KGN) share price has climbed 10% in response to the company’s June 2024 update.
Kogan is one of Australia’s largest online-only retailers, selling a wide variety of products.
Positive June quarter update
The company reported how its fourth quarter of FY24 performed compared to the fourth quarter of FY23.
Kogan’s gross sales came to $184.1 million, representing a decline of 1.5% year over year, which was a “positive trend” compared to the preceding three quarters. Revenue increased 0.2% to $105.6 million, with Kogan.com (excluding NZ’s Mighty Ape) revenue of $75.9 million (up 6.8%).
The company’s gross profit increased by 1.5% year on year to $39.9 million, with the gross profit margin improved 0.5 percentage points to 37.8%.
In terms of the paying membership numbers, Kogan FIRST subscribers, totalling over 502,000 as at 30 June 2024, compared to over 401,000 as at 30 June 2023, representing growth of 25% year on year. Meanwhile, Mighty Ape Primate subscribers improved 35% year on year to 23,000.
Group active customers reached 2.61 million customers, which included 1.91 million Kogan.com customers and 0.7 million for Mighty Ape.
Profitability
The company said its return to strong profitability continued in the fourth quarter of FY24.
Adjusted EBITDA was $9.5 million, up from $6.8 million in the fourth quarter of FY23. This led to full-year adjusted EBITDA of $40 million, up from $6.8 million in FY23.
Adjusted EBIT, which is probably a better profit measure, was $5.7 million for the FY24 fourth quarter, up from $2.8 million in the FY23 fourth quarter. This meant the business made $25 million of adjusted EBIT for the full 2024 financial year, up from a loss of $9.8 million in FY23.
The company said it finished with $41.2 million of cash, with no debt at 30 June 2024. It also had $73.4 million of inventory.
Final thoughts on the Kogan shares
Kogan shares have seen significant volatility in the last few years and this is yet another eventful day for the business.
It is an interesting business with tailwinds like online shopping adoption by Aussies and it can deliver rising profit margins if things go right. But, with how things have gone, I’d guess there’s more volatility to come sooner than later.
It’s not one I’d buy for my own portfolio, but it could be a contrarian for a brave investor who believes in the company’s potential long-term success.
