Kogan reports gross sales lifted 30% in Q3 amid coronavirus disruptions
Last Updated on by Segun Ayo
Kogan has announced that its business has generated “strong” gross sales and profit growth in the March quarter, despite “significant disruptions” caused by the COVID-19 pandemic.
The online retailer reported that year on year, during 3Q20, gross sales grew by more than 30% and gross profit by more than 23%, respectively.
In March alone, both gross sales and gross profit spiked more than 50%, respectively.
Adjusted earnings before interest, tax, depreciation, and amortisation grew by more than 4%.
As at March 31, Kogan had 1,809,000 active customers — a 13% year-on-year uptick.
Of the total, 62,000 active customers were added in March. Kogan touted the growth in active customers during the month as the “largest monthly increase” since its IPO.
Kogan founder and CEO Ruslan Kogan attributed the growth during the volatile period to the company’s supply chain.
“Over the past 14 years we have built a portfolio of businesses with world-leading supply chains. This ranges from contract manufacturers in China, to traders in global markets from the USA to Europe, to partners in Australia and New Zealand, and marketplace sellers from around the world … As a result of these long-cultivated elements of our business, we have been able to delight our customers and respond positively to these new circumstances,” he said.
The increase in online growth experienced by Kogan is not too dissimilar to ones that Woolworths reported last week.
In a letter to customers, Woolworths CEO Brad Banducci indicated how the use of the Woolworths app had gone up 320% and traffic to its website had more than doubled.
He also reported so far in April that cash payments in-store were down 35% as the use of tap-and-go increased.
However, while there are some that are reaping the rewards during the coronavirus outbreak, there are other businesses that have been heavily impacted, such as Virgin Australia, which entered into voluntary administration on Tuesday morning.
Vaughan Strawbridge, John Greig, Sal Algeri, and Richard Hughes of Deloitte have been appointed as voluntary administrators of the company.
“Our intention is to undertake a process to restructure and re-finance the business and bring it out of administration as soon as possible,” Strawbridge said.
“We are committed to working with Paul and the Virgin Australia team and are progressing well on some immediate steps. We have commenced a process of seeking interest from parties for participation in the recapitalisation of the business and its future, and there have been several expressions of interest so far.”
Velocity Frequent Flyer, while owned by the group, is a separate company and is not in administration.