Online trading platform Kogan (ASX:KGN)
reported a 24 per cent fall in adjusted earnings due to excess inventory, in the company’s March quarter update.
The company enjoyed favourable share price performances during the pandemic era, as investors speculated social distancing would boost online shopping on the company’s platform.
As a result, Kogan appeared to have overstocked products and misjudged consumer demand in the first 3 months of 2021, resulting in inventory costs exceeding guidance.
The online retailer’s outlook still remains optimistic, as Kogan believes demand in the peak shopping seasons such as Christmas and the end of the financial year can compensate for the current low levels of demand.
Kogan founder Ruslan Kogan emphasised, “While short-term trading conditions can fluctuate, we remain focused and committed to our long term vision”.
The company believes inflation in product prices and logistical costs will give the company an advantage in the coming time, with bountiful stocks at lower prices already in storage.
Kogan has also ramped up online marketing campaigns and offered promotions to boost consumption and improve its inventory balance.
hit a post-pandemic low of $10.84 after shedding 13.1 per cent by 1.20pm.