Baby Bunting has kicked off FY25 on a strong note, reporting a 37% increase in pro forma net profit after tax (NPAT) to $4.8 million for the first half. Despite ongoing pressures in the retail sector, the specialty baby goods retailer managed to lift total sales by 2.4% to $254.4 million while expanding its gross margin to 39.8%, up 260 basis points. The company remains on track to achieve its FY25 target of a 40% gross margin, thanks to strategic pricing adjustments, renegotiated supplier terms, and improvements in its supply chain.
CEO Mark Teperson highlighted the company’s strong execution and ability to grow despite economic headwinds. He pointed to range innovation and customer acquisition efforts as key drivers, noting that new customer growth was up 12% compared to the prior period. Exclusive branded products continue to be a major traffic driver, and with a strong pipeline of exclusive launches in the second half, he expects this momentum to continue.
While sales growth was steady, the company has also been actively investing in its physical retail footprint. Two new stores opened in Australia during the period, along with one store relocation, bringing the total network to 75 stores. A significant store refurbishment program is also underway, marking the company’s first major format update in 17 years. The first of these revamped stores, in Maribyrnong, Melbourne, is set to open in April 2025, with three more following in the second half.
Financially, the company has strengthened its balance sheet, reducing net debt to $9.1 million from $13.0 million in June 2024. However, the board has decided not to pay an interim dividend, opting instead to reinvest in growth initiatives and capital expenditure projects.
Looking ahead, Baby Bunting has reaffirmed its full-year guidance, expecting pro forma NPAT between $9.5 million and $12.5 million. The company is targeting comparable store sales growth of up to 3% while maintaining its 40% gross margin. Costs are expected to rise due to store expansion, wage increases, and continued investment in marketing and data analytics. However, a review of the New Zealand supply chain has identified $1 million in annualized savings, which should help offset some of these increases.
Despite ongoing economic uncertainty, Baby Bunting’s results reflect solid strategic execution, strong margin management, and continued customer engagement. With a focus on exclusive product offerings, store modernization, and operational efficiency, the company looks well-positioned for further growth in the second half of FY25.
