In morning trade, the Kogan.com Ltd (ASX: KGN) share price is charging higher.
At the time of writing, the struggling ecommerce company's shares are up 13% to $3.87.
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Why is the Kogan share price jumping?
Investors have been bidding the Kogan share price higher following the release of its annual general meeting update.
Kogan's CEO, Ruslan Kogan, acknowledged that its business "suffered" over the last 18 months but was positive that the company is on course to "historical operating margins during the second half of FY23."
That certainly will be a relief for shareholders based on its performance in FY 2023 through to the end of October and ahead of the key holiday season.
Here's a quick summary of how it is performing:
- Gross sales down 38.2% to $267.6 million
- Gross profit down 40.6% to $41.1 million
- Adjusted EBITDA down 104.4% to a loss of $0.5 million
- Net cash position of $20.1 million
Management explained that it does not believe that its abject year to date trading result is indicative of projected trading performance once the final sell-through of excess inventory is completed.
As a result, it is looking to the second half with confidence in its ability to return to an agile, inventory-light business returning strong operating margins. Mr Kogan commented:
Once the final sell through of inventory is completed, we plan to have the Kogan Group return to the historic growth trajectory and profitability that it has been able to deliver. We look to the second half of FY23 with confidence as the Kogan Group returns to being an agile, inventory-light business with strong operating margins.
Time will tell if Kogan delivers on this.
