Baby Bunting has delivered a solid performance in 1H FY25, with a 37% increase in pro forma NPAT to $4.8 million, compared to $3.5 million in the prior corresponding period. The company’s continued focus on strategic execution and operational efficiencies has positioned it well for its full-year goals.
Key Highlights
- Gross Profit Margin: Improved to 39.8%, a 260-basis point increase from 37.2% in 1H FY24, putting the company on track to hit its FY25 target of 40%.
- Comparable Store Sales Growth: Achieved 2.2% growth for 1H, with Q2 performance particularly strong at 4.5% growth.
- Pro Forma NPAT: Increased by 37% to $4.8 million.
- Net Debt: Reduced to $9.1 million, reflecting disciplined financial management.
Strong Campaign Execution Driving Results
CEO Mark Teperson highlighted the strong trading periods in November and December, where well-executed marketing campaigns resonated with customers, boosting sales. Teperson credited initiatives such as renegotiating supplier terms, refining pricing structures, and expanding exclusive and private-label offerings for driving significant margin improvements.
“Our ability to balance sales growth with profitability is reflected in our 39.8% gross margin for the half, which positions us well to achieve our 40% target for the full year,” Teperson said.
The momentum has carried into 2H FY25, supported by positive customer engagement and strategic product range innovations in key categories.
Store Refurbishments and Strategic Progress
Baby Bunting’s store refurbishment program is on schedule, with updates expected in February. Teperson noted that the results reinforce confidence in the company’s strategic roadmap, enabling Baby Bunting to navigate the evolving retail landscape with a disciplined approach.
Outlook for FY25
Baby Bunting reaffirmed its FY25 earnings guidance, expecting pro forma NPAT to land between $9.5 million and $12.5 million. Key assumptions include:
- Comparable store sales growth of 0% to 3%.
- Gross margin of 40%.
- Modest increases in operating costs due to wage inflation (3.75%), new store openings, and additional roles to support strategic initiatives.
- Capital expenditure of $10 million to $13 million, funded entirely through operating cash flow.
The company expects no major disruptions in economic or retail trading conditions and stable sea freight expenses.
A Positive Trajectory
With strong 1H results and clear progress on strategic initiatives, Baby Bunting is well-positioned to achieve its FY25 goals. Investors and stakeholders will be watching closely as the company continues to execute its transformative roadmap.
