Online retailer Kogan has warned of lower full-year earnings as the costs of holding enough stock to meet surging demand weigh on its bottom line.
The wide-ranging consumer goods business on Friday said it effectively doubled in size during the first half of the financial year following a significant increase in sales.
Since late last year Kogan has increased stock levels to ensure customers receive their goods on time, which has led to high warehousing costs.
The company also said inflation was evident in the cost of many products it was ordering prior to Christmas.
Kogan forecast full-year earnings of between $58 million and $63 million.
Royal Bank of Canada analyst Tim Piper said this was up to 18 per cent lower than investors’ expectations.
He said management had overestimated customer demand this year and were suffering the consequences of holding too much stock.
Yet Mr Piper said he was more concerned by easing sales.
Kogan said customer demand this year was below that of the last nine months of 2020.
Investors were concerned too. They sent shares lower by 11.33 per cent to $9.00 at 1143 AEST.