Retail stocks EDV, KGN shares down on ASX; Here’s why?

The Australian share market ended lower today following negative cues from overnight trade on Wall Street. The benchmark index ASX 200 was down 0.54% at 7,009.00 points at 12:23 PM AEST. Meanwhile, shares of various ASX-listed companies grabbed attention today as they released their half-year results for FY22. Endeavour Group Limited (ASX: EDV) and Kogan.com (ASX: KGN) are two key players from ASX 200 that announced their financial results for the said period today. 

The share price of both these companies, Endeavour Group Limited and Kogan.com, traded in the red zone during the intraday trading session today. One reason why the shares of these companies slumped so much could be due to the bearish trend in the overall market. Another reason could be that the results of these two business entities may have failed to impress their respective investors. By the end of day’s trade EDV shares slipped 12.33% and settled at AU$7.250. Similarly, KGN shares also tumbled 6.578% and settled at AU$3.550.  

With that said, in this article we will look at the results of the above companies one by one.

Kogan.com (ASX: KGN)

Today, in its results for the year ended 30 June 2022, Kogan revealed that revenue from ordinary activities in FY22 declined by 8.0% year-on-year; however, it grew by an annual compound growth rate of 20.1% versus FY20. As per the company, the financial year was considerably affected by ongoing pandemic-related interruptions and the resulting fluctuations in demand experienced across the entire retail industry, resulting in increased logistics and other operating costs.

Other details from the company’s FY22 results include:

• The business recorded a statutory loss after tax of AU$35.5 million in FY22.
• Gross Sales of AU$1.180 billion outperformed FY21 by 0.1%, reflecting a CAGR of 23.6% since FY20. Revenue of AU$718.5 million was down on FY21 by 8.0%, reflecting a CAGR of 20.1% since FY20
• The Group had a solid operating cash inflow of AU$61.8 million and net cash of AU$31.2 million.
• The company decided not to declare a FY22 Dividend. 

Endeavour Group Limited (ASX: EDV)

Today, Endeavour announced its results for the 52 weeks ended 26 June 2022. The company has maintained that in its first financial year of 2022, as an independently listed business, the business has delivered strong financial results. During this period, the Group’s Net Profit after Tax grew 11.2% to AU$495 million. The company’s results are as follows:

• Gross profit margin improved 89 bps to 23.2% (F21: 22.4%)
• The company’s earnings per share rose 11.3% against F21 at 27.6 cents.
• The company has determined to pay a fully franked final dividend of 7.7 cents per share, up 10% Vs. F21. The newly announced dividend represents a full-year payout ratio of 73.1%.

Sector Performance:

On the broader index, seven of 11 sectors traded lower today, where the consumer staples sector was the worst performer at one point, down 2.65%. 

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