The Kogan.com Ltd (ASX: KGN) share price is currently down by more than 3%.
It has been a difficult 2022 so far for the e-commerce business. In the calendar year to date, Kogan shares have dropped by 36%.
The past year looks even worse for the business, registering a 55% decline.
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What has happened to the Kogan share price?
In the last few months, there has been more investor attention on inflation and how interest rates may need to rise to combat that.
Billionaire Ray Dalio, the founder of Bridgewater Associates, once commented on how interest rates can affect asset prices:
It all comes down to interest rates. As an investor, all you're doing is putting up a lump sum payment for a future cash flow.
But Kogan has also been dealing with its own issues that have been impacting the company. The company commented on its FY22 half-year result in late February that things had not turned around yet.
HY22 commentary
In the first six months of FY22, it said that gross sales had grown by 9.4% to $698 million.
However, due to the company's problems, it made an earnings before interest, tax, depreciation and amortisation (EBITDA) loss of $2 million. It also made a statutory loss after tax of $11.9 million.
Kogan said that its losses reflected the impact of the continuing supply chain interruptions as a result of the COVID-19 situation and associated fluctuations in consumer demand.
Some of its costs, such as warehousing and selling costs, have been elevated because of the higher inventory levels. There have also been increased logistics costs.
However, the company has also been investing in expanding its Kogan First subscriber base because Kogan First subscribers demonstrate stronger loyalty and repeat purchasing behaviour than non-subscribers. It had 274,000 subscribers on 31 December 2021, with further growth to 310,000 in February 2022.
Broker opinion on the Kogan share price
UBS thinks it could be some time before the business recovers. The broker is 'neutral' on the Kogan share price, with a price target of $5.70.
