Baby Bunting expects sales bounce

Sales momentum at Baby Bunting is improving, augering well for Australia’s largest baby goods retailer when lockdowns in NSW, Victoria and the ACT come to an end later this month.

In a trading update at its annual meeting on Tuesday, Baby Bunting said same-store sales rose 3.2 per cent over the last seven weeks to October 3, after falling 6.4 per cent in the first seven weeks of the new financial year. This took same-store sales for the year-to- date down 1.3 per cent.

Excluding stores in NSW and the ACT, same-store sales for the year to date were up 4.7 per cent after jumping 10 per cent over the last seven weeks.

Online sales rose 37.7 per cent, after soaring 126 per cent in the same period in 2021. Online sales account for about 20 per cent of total sales.

Chief executive Matt Spencer said total sales for the year-to-date rose 1.5 per cent even though more than half the chain’s 60 stores were closed due to lockdowns.

“In terms of sales performance during lockdown, NSW is tracking to a similar sales
profile to what we observed during Victoria’s extended second lockdown last
year,” Mr Spencer said.

“Based on that experience, we anticipate a similar sales bounce back once retail re-opens in NSW,” he said.

Baby Bunting’s gross margins remained strong, rising 120 basis points to 38.7 per cent in the year-to-date, boosted mainly by sales of higher-margin private label and exclusive products, which accounted for 44 per cent of sales.

Mr Spencer issued no profit guidance for the year, citing uncertain business and trading conditions.

In a report last week, Morgan Stanley analyst James Bales forecast an uptick in sales later this year, citing Medicare data that suggested pregnancy scans in recent months were approaching “all-time highs”.

Baby Bunting expects to open eight to 10 new stores this year, six to eight in Australia and its first two stores in New Zealand late in the year.

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