Kogan.com has reported a $23.8 million loss for the first half of the financial year, impacted by a substantial ‘right-sizing’ of inventory involving unprecedented discounting.

Kogan.com reduced inventories to $98.3 million by 31 December 2022, down from $159.9 million on 30 June 2022. Gross sales were down 32.5% to $471.1 million and revenue dropped 34.3% to $275.6 million, due to the cycling of Covid related lockdowns and subdued sales.

However, a return to profitability occurred in January 2023 when adjusted EBITDA reached $1.5 million – the company’s first positive adjusted EBITDA month since July 2022.

Greater operational efficiencies were achieved through reducing the scope of underperforming product categories, redirecting marketing spend and managing fixed costs to align with current trading conditions.

Kogan.com had 2.55 million active customers (excluding Mighty Ape) at the end of the period with Kogan First subscribers exceeding 404,000, an increase of 47.6% on the previous corresponding period. Kogan Marketplace gross sales declined 35.7% year-on-year due to soft market conditions, but the platform grew rapidly in New Zealand since launch in June 2022.

During the second half of the financial year, Kogan.com expects to enhance and develop Kogan Marketplace, gain further efficiencies in operating costs, launch additional verticals in New Zealand, grow Kogan Mobile and other Australian verticals, and further enhance Kogan First.