SYDNEY, AAP – Online retailer Kogan has warned of lower earnings after executives wrongly assumed the pandemic sales surge would continue in 2021.

The wide-ranging consumer goods business on Friday forecast full-year earnings of up to 18 per cent lower than investors’ expectations, due in part to high warehousing costs.

Kogan late last year increased stock on hand after effectively doubling in size in the latter part of 2020.

Consumers ordered from online outlets in droves rather than visit shops for fear of contracting the coronavirus.

However, Kogan customers have not continued buying at 2020 levels.

Australia’s better control of virus outbreaks may have made shoppers comfortable in returning to old habits.

Fewer sales have left the company with much stock in storage.

Royal Bank of Canada analyst Tim Piper said management overestimated customer demand this year and were suffering the consequences.

Kogan forecast full-year earnings of between $58 million and $63 million.

Mr Piper said this was between 11 per cent and 18 per cent lower than investors’ expectations.

However, he said he was more concerned by easing sales.

Kogan has tried to reduce stock through discounts and spending more on marketing.

These measures have reduced earnings.

Kogan said staff had learned valuable lessons on how to better scale the operations of a fast-growing company.

Also affecting earnings was the company paying more for goods it will sell to customers.

Kogan said inflation was evident in the cost of products it was ordering for Christmas.

This inflation was due to COVID-19 and international shipping costs.

Investors were concerned too. They sent shares lower by 12.32 per cent to $8.90 at 1344 AEST.