Kogan has returned to a positive adjusted EBIT in the second half of FY23, as a result of ‘right-sizing’ inventory levels, optimising operating costs and realigning the business to current trading conditions.
Adjusted EBIT was $3 million in the half compared to $8.3 million in the red in the previous corresponding period. Adjusted EBITDA was $11.2 million in 2HFY23 compared to $1.6 million in 2HFY23, representing growth of 624.1% year-on-year.
During the half, inventories were reduced to $68.2 million ($60.6 million in warehouse and $7.6 million in transit) to meet current levels of demand. This is a reduction of more than 57% compared to the previous corresponding period when inventories totalled $159.9 million.
Gross sales declined 22.5% year-on-year to $373.7 million for the half, reflecting soft market conditions caused by inflationary pressures and interest rate rises, as well as realignment of inventory levels. These factors also impacted gross profit which decreased 3.6% year-on-year to $73.6 million. The business expects to return to growth in FY24.
Group active customers were 2.94 million at 30 June 2023 with Kogan First subscribers reaching 401,000, compared to 372,000 at 30 June 2022. Numbers are expected to accelerate further following the expansion of the Kogan First program.
Kogan.com founder and CEO, Ruslan Kogan said, “It has been an important year for Kogan.com as we drove efficiency through our business. Frugality, relentless pursuit of continuous improvement, data-driven decisions, and tough negotiations on behalf of our customers are all traits that are in our DNA.
“We know millions of customers are struggling with cost-of-living pressures, and we’ve been able to recalibrate our business to better support them. Our focus on making the most in demand products and services more affordable and accessible has never been more important.
“The value millions of customers get from shopping with the Kogan.com group is precisely why we exist, and we’re pleased to be in a position of strength and stability to best help them. Our focus on driving efficiency in the business means that we are now more agile than ever, with a low cost-of-doing-business, combined with a market leading offering across millions of products, and all the essential services.”