Why has the Kogan (ASX:KGN) share price plummeted 10%?

The Kogan (ASX: KGN) share price has plunged 10.4% this morning after the online retailer’s latest quarterly business update.
The post Why has the Kogan (ASX:KGN) share price plummeted 10%? appeared first on The Motley Fool Australia. –

broker downgrade ASX shares A woman holds her face and recoils in horror, indicating a share price drop

The Ltd (ASX: KGN) share price has plummeted in early trade today, dropping 10.4% in the opening moments. That comes after the Aussie online retailer’s latest business update highlighting “strong growth” in multiple metrics.

At the time of writing, the Kogan share price is trading at $11.17 apiece. 

What’s driving the Kogan share price?

Kogan this morning provided an update for the quarter ended 31 March 2021 (Q3 2021).

The Aussie conglomerate reported a more than 47% increase in group gross sales, comprising both and Mighty Ape. Kogan is integrating Mighty Ape after acquiring the Kiwi online retailer for $122 million in December 2020. 

Kogan Group grew by more than 65% during the quarter with gross profit up more than 54% after another strong quarter. revenue grew by more than 41% with growth across the board. That includes Exclusive Brands growth of 63% and Marketplace revenue up more than 100%. Third Party Brands and Kogan Mobile revenue grew by more than 13% and 23%, respectively.

Kogan reported fluctuating customer demand during the quarter as the company increased its inventory levels. That saw the retail group incur higher storage and demurrage fees for the quarter which could have investors watching the Kogan share price closely.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) declined by more than 24% during the quarter. That was thanks to increased operating costs and significant investments in marketing and people. There were also increased costs arising from the Mighty Ape acquisition and equity-based compensation expenses.

The Kogan share price is one to watch this morning following the update on its business and customer numbers. Active customers grew by more than 77% to 3,215,000 for with a further 742,000 active customers for Mighty Ape.

Shares in the Aussie retailer performed strongly in 2020 as online retail boomed during the coronavirus pandemic. The Kogan share price is up 78.1% in the last 12 months prior to this morning’s open.

However, the company has seen a 42.5% decline in its valuation since 25 January and is currently trading with a $1.3 billion market capitalisation.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why has the Kogan (ASX:KGN) share price plummeted 10%? appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!