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Online retailer Kogan (ASX:KGN) posted its half-year report to 31 December 2023 this morning, to much market applause.
Shares in the retailer jumped 22.55 per cent at lunchtime to $7.50 a share.
Kogan returned to profitability in the period, though, the story wasn’t overwhelmingly positive – revenue actually declined just short of 10 per cent vs the prior corresponding period (pcp).
Sales slipped by 5.6 per cent, suggesting that cost-of-living is impacting Kogan’s bottom lines, but that consumers are looking for cheaper goods.
However, gross profit just scraped under $90 million, a jump of 42.2 per cent. Gross margins improved by 36 per cent.
So why the surge in shares, even if revenue is slipping?
Bringing back a dividend probably had a lot to do with it, something which the stock suffered for when its shareholders learned they wouldn’t be getting one this time last year.
There’s also the fact Kogan’s 1Y returns are now at 119.3 per cent.
What makes the result more interesting is that only one broker, before the stock released its HY report at least, rates Kogan a ‘Buy.’
Meanwhile, eight brokers rate it a ‘Sell’ and four a ‘Hold.’
Kogan’s result also stays true to a trend through the Australian reporting season we currently witness – Cettire (ASX:CTT), Nick Scali (ASX:NCK) and JB Hi-Fi (ASX:JBH) have all done fairly well in terms of both fundamentals and market reactions.
That performance could perhaps be jarring for anybody at the RBA casting a wide net over what economic data is available, including large company results.
The ASX’s Brambles Limited (ASX:BXB) – a logistics giant that provides pallets to companies so they can transport goods – also had a strong run in 1HFY24, revealed in its result last year.
Of course, there’s the 9.9 per cent decline in Kogan’s revenue to also be cognisant of.
But for now, the market’s still bullish.
KGN shares were up 20.6 per cent, trading at $7.38 at 12:55 pm AEDT.
