Kogan.com Rebounds: Share Price Surges 17% Amid Business Resurgence

Highlights:

• Kogan.com Surges 17%: Amidst a consumer discretionary sector dip, Kogan.com's share price jumps 17%, defying market trends.
• Membership Momentum: Kogan FIRST, the loyalty program, sees a remarkable 133.5% growth, contributing AU$33.9 million in gross sales, signaling a shift in business dynamics.
• CEO's Confidence: Founder and CEO Ruslan Kogan expresses optimism, stating the company has returned to a position of "stability and strength" after delivering on multiple customer-focused projects.

Online Retailer Defies Sector Trends

In a surprising turn of events, Kogan.com Ltd (ASX: KGN) is experiencing a share price surge of 17%, reaching AU$5.10 per share, in stark contrast to the broader consumer discretionary sector's downturn. The sudden boost follows the company's latest business update, instilling confidence in investors.

Business Update: Profits on the Rise

Kogan.com's H1 FY2024 report reveals a notable uptick in profits. Despite a 9.1% decline in gross sales for Kogan Marketplace, the company's largest contributor, and a 25.1% reduction in gross sales for the 'Exclusive Brands' segment, the membership offering, Kogan FIRST, shines with a remarkable 133.5% growth in gross sales, contributing AU$33.9 million. The platform's capital-light model, marked by a 13.2 percentage point improvement in gross margin, has played a pivotal role in this success.

Key Metrics Highlight Business Strength

In addition to the standout performance of Kogan FIRST, other key metrics for the first half include a group of 2.744 million active customers, gross sales of AU$445.5 million (down 5.6% YoY), a total gross profit of AU$89.5 million (up 42.1% YoY), adjusted EBITDA of AU$21.5 million (compared to a AU$4.4 million loss), and adjusted EBIT of AU$14 million (versus a AU$12.7 million loss). The company finished the half with AU$83.3 million in cash and no external debt.

CEO's Optimistic Outlook

Ruslan Kogan, the Founder and CEO, expressed optimism about the company's progress, citing a return to "stability and strength" in the past six months. He highlighted the growth in the Kogan FIRST loyalty program and community, boasting over 466,000 subscribers.

Market Reaction and Future Prospects

Kogan's share price, previously flat for the past year, is now 54% above its 52-week low, indicating a positive shift in investor sentiment. The market response reflects growing confidence in the company's strategic initiatives and renewed profitability.

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