In early trade the Kogan.com Ltd (ASX: KGN) share price has surged to a 52-week high following its first quarter update.
At the time of writing the ecommerce company's shares are up over 7% to $7.50.
What happened in the first quarter?
It certainly was an eventful quarter for Kogan. During the three months it launched key new verticals Kogan Money Super, Kogan Mobile NZ, Kogan Energy, and Kogan Money Credit Cards.
Each of these verticals is being underpinned by a strong commercial partnership with a top tier incumbent provider that focuses on providing customers with a market leading offer.
The company is building on this with an agreement with Corporate Travel Management Limited (ASX: CTD). That agreement will see it offer Kogan Travel branded travel services during FY 2020. These include flights, cars, and holiday packages.
How did Kogan perform?
During the first quarter Kogan reported a 16% increase in gross sales and a 28% lift in gross profit. And thanks to good cost control, operating costs grew less than 3% over the prior corresponding period.
Key drivers of this growth were its Exclusive Brands and Kogan Marketplace businesses.
Exclusive Brands revenue grew more than 35% over the prior corresponding period and the Kogan Marketplace more than doubled its gross sales quarter on quarter. This offset a heavy decline in Third Party Brands revenue due to lower mobile phone sales.
One slight disappointment, though, was its active customer growth. Although customer numbers have grown 14% year on year to 1,653,000, this is only 2.7% or 44,000 higher than the end of FY 2018.
Nonetheless, the company's founder and CEO, Ruslan Kogan, was pleased with the quarter.
He said: "The first quarter of FY20 saw our team continue to execute our long term plan to drive better value and choice for our customers. The team delivered the launch of many initiatives that have been a focus in our business for a long time. Each of Kogan Mobile NZ, Kogan Money Credit Cards, Kogan Money Super and Kogan Energy represents the entry by Kogan.com into a substantial and lucrative market that is ripe for disruption."
Looking ahead, Mr Kogan appears confident that its strong form can continue.
"The product range available on our site is the biggest it's ever been, our service is the best it's ever been and we have the widest logistics network out of any eCommerce company in Australia — all this means our customers will get their Christmas orders faster and cheaper than ever before. We're actually a little worried Santa will spill his milk and cookies when he sees our lineup for Christmas," he added.
Also on the rise this morning is fellow ecommerce company Redbubble Ltd (ASX: RBL). Its shares are up 22% following a strong first quarter update.
