Kogan.com (ASX:KGN) shares slumped 26% on Wednesday after it revealed a surprise 6% decline in gross sales to $178.3 million and a 2% drop in revenue to $105.9 million for the March quarter.
Kogan had a rational explanation for the weakness—it was a result of a deliberate move to shift the business to a more capital-light footing.
But the slide meant the shares lost all the gains in 2023 and were back at levels seen in early to mid-January.
The shares were trading around $5.19 just after 1 pm on Wednesday.
The slide came despite some good news in the update.
Gross profit was up 13% on the prior year to $39 million while gross margin improved by 5.2 percentage points to 36% on improved platform-based sales and profitability of warehouse inventory sales.
Inventories fell 9% year-on-year to $71.1 million at March 31.
But cash on hand was down at $34.1 million at March 31 compared to net cash of $49.1 million a year prior.