Morningstar slashes Kogan.com's FY earnings outlook as inventory weighs on margins

Kogan.com

24/01/2023 21:11

** Morningstar says Australia's Kogan.com's  KGN.AX 
inventory position has negatively affected the retailer during
the key Christmas trading period more than brokerage had
expected
    ** KGN posted a HY adjusted EBITDA loss of A$4.4 million
($3.10 million), a steep fall from an adjusted EBITDA profit of
A$17.4 mln in the same period last year
    ** Brokerage slashes co's FY23 gross sales and adjusted
EBITDA estimates by 10% and 64% to A$1 bln and A$16 mln
respectively
    ** Anticipates dividends to remain suspended till August
2024; expects co to reinstate dividends after stable gross sales
growth and recovery of EBITDA margins
    ** However, Morningstar sees profit margins for the online
retailer to expand in the second half of FY23 and also estimates
top-line growth to reignite
    ** Says near term earnings downgrade is immaterial to
unchanged fair value estimate of A$10.70/share with long-term
earnings estimates remaining intact
    ** Four of eight analysts rate the stock "hold" and four
"sell"; their median PT is A$3.70 – Refinitiv data
    ** Stock fell 60.3% in 2022
($1 = 1.4201 Australian dollars)
 (Reporting by Rishav Chatterjee in Bengaluru)
 ((Rishav.Chatterjee@thomsonreuters.com;))