The Kogan.com Ltd (ASX: KGN) share price is surging from the open on Monday after the online retailer reported its FY24 results.
Kogan shares are swapping hands 7% higher at $4.66 apiece this morning as investors process the update.
Meanwhile, the S&P/ASX 200 index (ASX: XJO) is up 0.33% at the time of writing.
Let's see what the company posted.
ASX retail share spikes on profit growth in FY24
Key highlights from the period include the following:
- Revenues declined by 6.1% year over year to $459.7 million.
- Gross profit surged by 23.3% to $168.4 million.
- Adjusted earnings before tax jumped to $40.0 million, up from $6.8 million in FY23.
- Statutory net profit reached $0.1 million, up from the $25.9 million loss recorded last year.
- The year ended with $41.2 million in cash and no debt.
- The dividend was reinstated for FY24, with a 7.5 cents per share payment declared, bringing the total payout to 15 cents per share.
What else happened in FY24?
The ASX retail share had a mixed set of results, with a sales decline of about 6% and a 23% growth in gross profit.
Gross profits were up due to the higher contribution of platform-based sales, which contributed 62% of revenues for the year, compared to 57% last year.
And in Kogan's products segment, gross profits were up 40% year over year to $39 million.
Despite this, the products division reported a 15.6% drop in revenue to $223.8 million, driven by a decision to reduce inventory levels.
Inventory levels finished the year at $73 million, still roughly $5 million higher than last financial year.
Meanwhile, the revenue of the ASX retail share's "verticals", including its advertising platform, increased by 20.5%.
The company also saw growth in its Kogan FIRST and Mighty Ape PRIMATE loyalty programs, with subscriber numbers rising 25% and 35%, respectively.
Finally, the board declared a final dividend of 7.5 cents per share, for a total FY24 dividend of 15 cents.
What did management say?
Kogan.com founder and CEO Ruslan Kogan noted the company's return to growth in FY24:
FY24 was a milestone year for Kogan.com. Our business returned to a position of profitability and strength, having navigated through the previous two and a half years of turbulence.
We got through this by restructuring and improving our operations, focusing on growing the right areas of our business, rapidly growing platform-based sales, and most importantly, investing in our loyal customer base. This has helped put Kogan.com in its strongest position ever.
What's next?
Looking ahead, Kogan.com plans to continue its focus on profitability.
Its trading update for July 2024 shows a positive start to the new financial year, with revenue up 15% year over year and pre-tax earnings increasing by 53%.
And Kogan's CEO says its business model is looking to increase its advantage via its competitive pricing:
In response to the ongoing cost-of-living crisis that our customers are facing, we are doubling down on our commitment to affordability and value. This was at the core of our brand when we launched 18 years ago, and we understand the economic challenges our customers are facing.
Everything we do is aimed at enabling our customers to live their best lives without having to strain their budgets. You'll see this play out in all our investments and launches going forward.
Our team's obsession with delivering remarkable value for our customers has underpinned the growth of Kogan.com into the top performing Australian e-commerce company for nearly two decades. These efforts are more crucial than ever, and we're primed to deliver again for our customers in FY25.
ASX retail share snapshot
The Kogan share price has been under pressure over the past 12 months, down 14%. It is trading 17% lower this year to date.
