As a result,Kogan warned its underlying performance would suffer in the near term as it worked through the problems,with earnings before interest,tax,depreciation and amortisation (EBITDA) now likely to fall between $58 million and $63 million for the financial year.
This is between $12 million and $9 million below consensus forecasts of $72 million in EBITDA,and falls short of even the most bearish analyst forecast of $67 million. Shares in the company fell 14.3 per cent to $8.70 on Friday,their lowest price in the last 12 months.
Investors have been cooling on Kogan in recent months as the company’s trading updates have shown the business has not been able to keep up with the blistering growth rates it reported throughout COVID-19. Shares in the company have more than halved in value since the start of the year.
At Kogan’s trading update in April,the company warned it was experiencing higher costs and issues due to an excess of inventory coupled with weaker consumer demand off the back of COVID. Analysts noted while many retailers were experiencing these issues,Kogan’s were exacerbated by the business’ aggressive expansion strategy.
Judging by Friday’s trading update,it appears that strategy is continuing to hurt the business. Over the first half of the financial year,the company rapidly expanded its logistics footprint to 31 facilities,with the sprawling network leading to logistical issues when shipping and transporting goods.