Kogan.com Ltd (ASX: KGN) shares are having a tough finish to the week.

In morning trade, the ASX 300 stock is down 13% to $5.21.

As a comparison, the All Ordinaries index is currently trading 0.2% higher in early trade.

Why are Kogan shares crashing?

Investors have been selling the online retailer's shares this morning after responding negatively to the release of a trading update.

That update reveals that Kogan delivered accelerated growth during the peak retail sales period, which has underpinned solid sales and profit growth during the first half.

Management notes that the peak retail sales period comprises the Black Friday, Cyber Monday, Christmas, and Boxing Day sales events, which all occur across the months of November and December.

It highlights that a strategic decision to invest incremental profitability in marketing and promotional activity from November helped the company to achieve its accelerated top line growth.

This led to the ASX 300 stock's gross sales growing 10.3% to $492.5 million during the first half, whereas revenue was up 9.9% on the prior corresponding period to $272.7 million.

Also failing to stop Kogan shares from falling was news that its gross margin improved by 2.8 percentage points to 38.9%. This underpinned an 18.3% jump in gross profit to $106 million for the half.

Kogan's adjusted EBITDA grew at a similar rate during the six months. It was up 17.5% over the prior corresponding period to $25.3 million, whereas first half adjusted EBIT grew 21.2% year on year to $19 million.

Why the selling today?

While this result looks strong on paper, it was short of the market's expectations.

For example, the consensus estimate was for adjusted EBITDA of $28 million for the first half, which means that its earnings were 9.6% below forecasts.

Mighty Ape update

The damage appears to have been done partly by the struggling Mighty Ape business.

Management notes that throughout 2024 it undertook a digital transformation for Mighty Ape, which successfully went live in late October. This milestone facilitated the launch of the Mighty Ape Marketplace and enhancements to the PRIMATE loyalty program.

Unfortunately, implementation and technology challenges temporarily adversely impacted Mighty Ape sales and profitability during the peak period.

However, with these issues now largely resolved, management believes the new unified platform will deliver significant long-term benefits for the company.

Following today's decline, Kogan shares are now up just 2% over the past 12 months.