Baby Bunting shares spike after strong FY25 profit, better than expected FY26 guidance
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More news: Baby Bunting has seen its shares surge in morning trade after baby goods retailer reported net profit after tax at the higher end of the guidance range for financial year 2025 and higher than expected FY26 guidance.
At 11:30am AEST, shares in Baby Bunting Group had surged 31.4% to $2.43.
RBC Capital Markets analyst Wei Weng-Chen flagged that the midpoint of Baby Bunting’s FY26 guidance range of between $17 million and $20 million represents a “12% upgrade to FY26 consensus expectations ($16.5 million)”.
He also flagged that Baby Bunting’s Store of the Future refurbishment program is “evidencing strong results”, with a further 10 to 12 refurbishments to be rolled out in FY26.
The retailer is also targeting the opening of five new large format stores as well as three new small format pilot stores in the first half of FY25, with a further two or three to follow in Q4 if successful.
Baby Bunting full-year profit rises four fold
The news: Baby products retailer Baby Bunting has reported a more than four fold lift in statutory profit for the 2025 financial year amid record sales following store refurbishment.
The numbers: Statutory profit increased from $1.7 million to $9.5 million, topping average forecasts of $9.37 million, according to Visible Alpha data. This was at the lower end of its guided range of $9.5 million to $12.5 million.
Sales lifted 4.7% year on year to hit a record of $521.9 million and gross margin increased from 36.8% to 40.2%, exceeding the FY25 target of 40%.
The company declared no final dividend, with funds to support the group's ongoing growth strategy. No final dividend was paid in FY24 either. Analysts were expecting a final dividend of 1 cent per share.
Baby Bunting is guiding FY26 pro forma NPAT in the range of $17 million to $20 million. This is based on several assumptions regarding comparable sales growth of 4-6%, gross margin of 41% and $30 million to $35 million of capital expenditure, among other metrics.
The context: Baby Bunting said its 'Store of the Future' refurbishment program had delivered 28% sales uplift across the three stores re-opened in FY25.
What they said: "The Store of the Future program has so far exceeded our expectations and customer feedback has been overwhelmingly positive," Baby Bunting CEO Mark Teperson said.
Teperson also flagged that the company has about 820,000 total active customers, a 4.5% year-on-year increase.
