Australian e-commerce platform Kogan.com (ASX: KGN) has defied weaker consumer sentiment to post another strong performance in the first half of the current financial year, building on a return to profitability for the group in FY24 for the first time in three years.

Kogan.com, which also operates the Mighty Ape online retail platform in New Zealand, posted a 19 per cent increase in net profit to $10.33 million for the six months to the end of December as gross sales rose 15.4 per cent to $414.8 million. Revenue growth was even stronger, up 22.3 per cent to $198.9 million.

However, in an update revealed today, growth appears to have stalled in January with Mighty Ape’s performance especially being impacted by platform upgrades initiated late last year.

The latest FY25 half-year performance was underpinned by Kogan.com’s strong results during the peak November and December trading period which saw gross sales and revenue surge 34.4 per cent and 32.2 per cent respectively, aided by an “optimised marketing strategy that delivered increased market share”.

Group active customers topped three million, up 9.4 per cent from a year earlier, with Kogan.com's active customers growing 15.7 per cent to 2,345,000.

“Having returned the company to profitability in FY24, I’m pleased to report today that we have built on that momentum and returned the business to strong sales growth in 1HFY25,” says Kogan.

“This was achieved through disciplined execution, operational efficiencies, and strategic initiatives that we expect will continue to drive sustainable growth into the future.

“As our customers continue to navigate the ongoing cost-of-living crisis, we are committed to easing the burden by offering market-leading prices on the most in-demand products and essential services.

“By leveraging our scale and strong supplier relationships, we deliver remarkable value. From everyday essentials to the latest technology and exclusive member benefits, we remain focused on helping our millions of customers live their best lives.”

Kogan only just returned to profitability in FY24 with a net profit after tax of about $80,000 - its first profit since FY21.

In the latest half-year, the company's Mighty Ape result was significantly impacted by technical issues involving a major upgrade to the e-commerce platform’s website which began in late October last year.

The New Zealand subsidiary generated revenue of $73.9 million and gross profit of $20.3 million, leading to adjusted EBITDA of $1.9 million for the half-year.

Kogan says that prior to November, Mighty Ape’s profitability was “broadly stable year-on-year while the company was facing sub-optimal trading conditions in NZ”.

As a result, Mighty Ape’s adjusted EBITDA slumped 96.2 per cent over the November and December 2024 peak sales period.

“The team has been diagnosing and remedying many of the major issues, with some work yet to go,” says the company. “We expect to resolve all major issues in the coming period.”

In its second-half update accompanying today’s interim results, Kogan has reported a mixed performance for January with gross group sales up 24.9 per cent year-on-year to $80.4 million.

Kogan.com accounted for $70.8 million of total sales, up 30.8 per cent, while Mighty Ape’s sales of $9.6 million were down 6.6 per cent. Group adjusted EBITDA for January was $3 million, down 38.1 per cent from a year earlier.

Meanwhile, Mighty Ape CEO Daniel Balasoglou has resigned his position to be replaced by Robert McEwan, the general manager of operations and customer service.

Kogan has also announced that Greg Ridder and Harry Debney plan to retire from the board at the 2025 and 2026 annual general meetings respectively. Both directors have been with Kogan since its 2016 ASX listing.

Kogan.com, which had cash of $67.7 million at the end of December and no debt, is paying an interim dividend of 7c per share.

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