Shares in online electronics retailer Kogan sink after Mighty Ape tech issues drag earnings
In a trading update on Tuesday, Kogan said Mighty Ape — which sells electronic games, board games, toys, homes and collectables — continued to be impacted by technical challenges following the website platform upgrade announced in February.
This affected sales performance and inventory levels, contributing to a 63.7 per cent decline in adjusted earnings to $2.5 million in the four months to the end of April.
Kogan shares fell 8.4 per cent to $4.14 in early trade following the update. Shares are off 32.5 per cent for the year so far.
But the company said 'early signs of recovery are evident, with gross sales showing positive momentum driven by the Mighty Ape marketplace scaling rapidly since launch'.
'Over the coming months Mighty Ape will continue to right-size inventory levels,' Kogan said.
Group revenue decline 0.7 per cent over the four-month period, with the 8.4 per cent growth in Kogan offset by a decline at Mighty Ape.
The Ruslan Kogan-led Kogan said group active customers grew 27.3 per cent to 3.4 million as at April 30.
Kogan active customers grew 38 per cent to 27 million, while it declined 1.8 per cent to 695,000 at Mighty Ape.
Kogan acquired NZ-based Mighty Ape in December 2020 for just over $120m in the hopes of accelerating the group's growth across the Tasman.
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