Kogan has reported a gross sales drop of 22.5% year-on-year (YoY) to $373.7 million in the second half of the 2023 financial year, with gross profit down 3.6% to $73.6 million.
Despite the decline in topline performance, the online marketplace recorded adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of $11.2 million in 2H FY23 compared to $1.6 million in 2HFY22.
The adjusted EBIT was $3.0 million in 2HFY23, compared to $8.3 million in 2HFY22 .
Kogan attributed the sales drop to soft market conditions caused by inflationary pressures and interest rate rises. The company expects topline performance to return to growth over FY24.
Kogan also cited the realigning of the inventory levels as a contributing factor to performance. Inventory was reduced to $68.2 million, comprising $60.6 million in-warehouse and $7.6 million in-transit, as at June 30. This represented a reduction of over 57% since 30 June 2022, when inventories totalled $159.9 million.
This adjustment in inventory levels reflected a complete right-sizing of inventory to current levels of demand, Kogan reported.
Founder and CEO Ruslan Kogan said the company has been driving efficiencies throughout FY23.
“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,” Kogan said.
“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 in these times.
“Our focus on making the most in-demand products and services more affordable and accessible has never been more important.”
“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.”