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Investors are discovering what ‘Covid normal’ means for the discretionary online retailers, now that consumers are abandoning their mouses and rediscovering those quant things known as bricks-and-mortar shops.
E-commerce advocates contend that the surging demand reflected a deeper change in the mindset of consumers – especially younger ones. In other words, online commerce will continue to encroach on physical sales from their low levels of penetration relative to, say, the US market.
But updates from some of the key providers suggest the post-pandemic pull-back might be deeper than expected.
Kogan (ASX:KGN) reported a 3.8 per cent decline in gross sales for the March quarter, year-on-year. In a rare blip, the company also traded in the red with an adjusted underlying loss of $800,000.
Rather than being troubled by supply chain related shortages, Kogan had built up its inventory to cater for the same level of demand.
Management accepts the need to “recalibrate” the company’s cost base, but refers to an overall slowdown in Australian e-commerce and indeed that’s borne out elsewhere.
In its update, Redbubble (ASX:RBL) reported year-to-date revenue of $384 million, down 16 per cent. Excluding the transient category of Covid masks, revenue abated 4 per cent.
A marketplace for arty types to sell goods such as apparel, stationery and housewares, Redbubble also revealed a $6 million operating loss for the March quarter.With a slant to furniture and homewares, Temple & Webster (ASX:TPW) appears to be faring better, with year-on-year revenue growth of 23 per cent. Once again, sales momentum is slowing given revenue in the December 2021 half climbed 46 per cent and a year earlier the company was achieving triple-digit growth.In the specialist sector, online bookshop Booktopia (ASX:BKG) this week reported a one per cent dip in March quarter sales, to $64 million, amid “volatile and unpredictable’’ conditions. Underlying earnings fell 65 […]
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