ASX Earnings Wrap: Rising inflation hits retailers; Kogan down 15pc but Redbubble rises 13pc
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It’s earnings season again as the ASX market announcements page becomes increasingly flooded with earnings lodgements.
To save you the trouble of trudging through it all, we’ve wrapped up the highlights from some of the reports that caught our eye.
During the year, Redbubble completed an operational review to return the company to growth and achieve sustainability.
As a result, during Q4, the group’s Gross Profit After Paid Acquisition (GPAPA) margin was 28.5%, 5.5% above the pcp and 3.50% above the historical average.
“We have learnt from these mistakes and taken decisive actions to rightsize our cost base, and accelerate our return to positive underlying cash flow,” said CEO, Martin Hosking.
Looking ahead, Redbubble says it remains cautious and expects market conditions to remain challenging.
“We are focused on what we can control – ensuring we are operating as efficiently as possible and maintaining strong cost discipline.”
The company expects to see the full benefit of cost-saving measures implemented in FY23 in FY24, where GPAPA margin in FY24 is forecast to be between 23% and 26%.
“We continue to believe in the potential of our two marketplaces, Redbubble and TeePublic, and are confident that both businesses can deliver sustainable growth,” said Hosking.
The Redbubble share price jumped by 13% after the announcement, reflecting the market’s confidence the retailer can deliver on its plans.
Kogan meanwhile crashed by 15% this morning after gross sales and revenue for the full year declined by around 30%.
The company said it was impacted by the soft top line performance and suppressed margins in the first half, as the company tried to correct its inventory levels.
Its platform-based sales, which deliver higher margin revenue with lower operating costs, became the majority of the Kogan.com business, outgrowing the Product Divisions (excluding Mighty Ape) for the first time.
Kogan Marketplace gross sales however declined 28.5% year-on-year due to soft market trading conditions.
“Having returned Kogan.com to sustained and increasing underlying profitability in the second half of FY23, we look to FY24 with confidence,” said CEO, Ruslan Kogan.