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KGN Details
Quarterly Earnings Update: Online retailer Kogan.com Ltd.’s (ASX: KGN) stock tumbled 17.749% on April 23, 2019 as the Group reported an operating cash loss of $635,000 for the current quarter despite the group reporting strong growth in Gross Transaction Value and revenue, as well as improvement in its inventory management.
According to the release, the group recorded sales growth of 46.1% in Q3 FY18 as against of Q3 FY17. Further, the gross transaction value rose around 49.8% during the three months to March 31, 2018 as compared to prior corresponding period. Additionally, Kogan gained Active customers of about 1,288,000 as at 31 March 2018 and has a cash balance of around $19.3 Mn during the same period. Further, the group reduced its inventory by $15.1 million in the third quarter, finishing the period with $54.7 million in stock, which drove a reduction in trade and other payables of $20.6 million to $30.8 million.
Moreover, the company continued to strategically invest in marketing activities in Q3 FY18, which is expected to provide a strong return-on-investment (ROI) in the short term.
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Quarterly Performance Trend (Source: Company Reports)
As per the management, Kogan.com commenced the new calendar year with a strong quarter of continued growth on the back of its long-term strategy. The business is poised to continue its growth trajectory into the seasonally strong end-of-financial-year quarter. The stock price was up by 347 per cent in the past one year but has been down 2.6% on April 24, 2018 subsequent to the heavy fall witnessed a day before.
Given the run-up and mixed updates, we put a “Sell” recommendation at the current market price of $ 7.400, as the stock might now witness some volatility.
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KGN Daily Chart (Source: Thomson Reuters)
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