The table below shows consensus analysts forecasts for Kogan.com (ASX:KGN) EPS as at the beginning of April in 2021 for the following three years. Below that is the actual EPS results for those years.
EPS forecasts vs actual
FY21 | FY22 | FY23 | |
Forecasts as at 1 Apr 2021 | 0.482 | 0.571 | 0.712 |
Actual results | 0.033 | -0.332 | -0.24 |
The moral of the story is that forecasting is hard. Analysts were expecting a continuation of strong growth. The reality was far more sobering.
Kogan has had a rollercoaster ride since listing in 2016. The share price peaked at $25.57 in October 2020. It is now $5.23, 80% below its peak, but also 92% higher than the low point that was reached in July of 2022.
So what have been the challenges and the triumphs that have led to this wild ride? In a nutshell, it’s about inventory, but first let’s start with some background.
Kogan is an online retailing business. They are best known as an online platform for the sale of goods to retail customers, but they actually have a wide array of business interests. The majority of revenue and profit comes from the sale of goods and services to Australian and New Zealand retail customers. The other types of revenue they earn are:
seller-fee based revenue from Kogan marketplace
commission based revenue from the verticals including Kogan Mobile, Kogan Internet, Kogan Insurance, Kogan Money, Kogan Cars, Kogan Energy and Kogan Travel.
Online retail includes brands that are exclusive to Kogan as well as third-party brands. There is also an online marketplace where other sellers are able to market their wares. In this space it is competing with the likes of Catch (owned by Wesfarmers (ASX:WES)), Ebay and Amazon. Their main business lines are shown in the diagram below.
In December 2020, Kogan acquired one of New Zealand’s leading online retailers, Mighty Ape. Mighty Ape is now a significant part of the business.
For reporting purposes the business is divided into two segments, Kogan.com and Mighty Ape.
The revenue and EBITDA breakdown for FY23 is shown below:
Revenue | EBITDA | |
Kogan.com | 68% | -33% |
Mighty Ape | 32% | 133% |
The core components of the business include:
Kogan First
Kogan Marketplace
Exclusive…
