Sports fans push Kogan back into green

Kogan.com founder and chief executive Ruslan Kogan says cost of living pressures haven’t stopped Australians from splashing cash on TVs to satisfy their love of watching sport.

With customers keeping a close eye on their budgets and opting to spend more time at home to save money, Kogan said the online retailer has been buoyed by higher sales for consumer staples such as TVs and appliances.

Meanwhile, luxury electronics – such as drones and DSLR cameras – that are particularly exposed to trends, had taken a back seat with consumers, Kogan added.

Ruslan Kogan, founder and CEO of Kogan.com.Credit: Louis Trerise

“People are at home watching the Olympics, they’re watching the tennis grand slams, the footy finals and so on, which means that they’re buying new TVs. They’re buying new appliances for their house to help them live their best lives,” he said.

“When there is a cost of living crisis and people are tightening their belts, we also see a lot of people come to us because they’re doing a lot more research. We love an environment where people are shopping around.”

The online retailer’s full-year results on Monday showed a return to profitability. Kogan posted a net profit of $83,000 for the period following a loss of $25.9 million in 2023. Full-year revenue clocked 6.1 per cent lower at $459.7 million.

“If you look on a year-on-year basis, our revenue went down, but you’ll see there are charts there that show that we have returned to growth,” Kogan said.

Investors welcomed the latest numbers, sending the online retailer’s stock up over 11 per cent to $4.85.

Kogan.com is trying to restabilise after a turbulent few years. While its share price surged during the pandemic as customers spent more on home comforts, things came off the boil quickly once lockdowns were eased.

The subsequent dip in consumer spending left the local e-commerce giant with warehouses full of surplus stock, and the stock price nosediving to below pre-pandemic levels.

Kogan said on Monday that his focus was now on increasing the quality of revenue and earnings by accelerating the growth of the retailer’s subscription model, in which members pay a yearly fee to receive exclusive discounts.

“We’ve got our Kogan FIRST program of over 500,000 subscribers and they’re getting additional benefits with each transaction … That’s how we’re driving that customer loyalty,” he said.

In April, Kogan.com hiked its premium subscription fee from $99 per year to $129, but the chief executive said the perks outweighed the cost of membership.

“We assess (the cost) on an ongoing basis, but at this stage the fees are what they are,” he said.

The retailer will pay a final dividend of 7.5¢ to its shareholders for the first time in three years, following a pause during the COVID-19 pandemic.

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.