KGN reports loss of $24 million and says the worst is over

Kogan isn’t the only pure-play e-commerce retailer facing tough conditions as trade returns to normal more than a year after pandemic restrictions were lifted.

Wesfarmers-owned marketplace Catch posted a $108 million loss this month, with management also saying it overinvested during the COVID period.

Online beauty market Adore Beauty also cited “subdued consumer sentiment” on Monday as it told investors it no longer expects double-digit sales growth in the second half of the year.

“[The second half] is likely to be flat from the corresponding period last year as the company focuses on margins and remains profitable,” it said.

Adore reported a loss of $90,000 for the six months ended December compared to a profit of $2 million at the same time last year.

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Chief Executive Tamalin Morton cited increased discounts and inflationary pressures as reasons for the result.

“While many of our customers view beauty products as part of their daily routine, sales and
Margins in the first half of fiscal 2023 were impacted by increased advertising activity and inflationary cost pressures,” she said.

The retail sector delivered mixed corporate results on Monday, with inventories and discounts weighing on results.

Plus-size clothing brand City Chic saw shares fall more than 11 percent in the first hours of Monday’s session after the company reported a $27.2 million half-year loss.

Boss Phil Ryan told investors consumer demand “shrunk” in the six months to December while margins were hit by promotional activity as rebates were used across the sector to boost demand.

The group also introduced an additional $19.6 million provision for inventory in Europe, the Middle East and Asia, in part due to “slow categories” in those regions.

Jewelery retailer Michael Hill had better news to report, posting net income up 1.2 percent to $37.5 million, and the company confirmed that it expects full-year profits to be ahead of the previous year at this time previous year will be. Shares rose 2 percent to $1.05 in early afternoon trading.

Kogan shares were also up more than 4 percent through early Monday afternoon, while Adore was up 1.5 percent. In contrast, City Chic was more than 10 percent weaker.