Infant retailer Baby Bunting soars on profit guidance, five-year growth plans

Baby Bunting shares have soared after the infant retailer reaffirmed its full-year profit guidance and outlined a new five-year strategy to boost earnings.

The group told the market on Thursday it still expected net profit to be in the range of $2 million and $4m, with total sales improving one per cent since the start of May. The news sent shares up 19 per cent to $1.47.

Comparable store sales from May 1 to June 24 were down 0.7 per cent compared with the prior corresponding period, but the company said it was a favourable change to the 7.7 per cent decline between January and April.

“This improvement reflects the benefits of recently introduced new product assortments, a renewed focus on new customer acquisition, the introduction of a refreshed promotional engagement and a proactive branding and go-to-market campaign,” it said.

Baby Bunting the same day announced it had signed two new exclusivity agreements with baby car seats and stroller retailers Nuna Baby Australia and Bugaboo New Zealand.

Baby Bunting chief executive Mark Teperson said the five-year deal with Nuna and 3-year agreement with Bugaboo were designed to stabilise and optimise its existing business, providing the blueprint for delivering over 10 per cent EBITDA margin.

“We are making good progress in implementing the first phase of our strategic initiatives including the introduction of a program of work to simplify our pricing strategy, renegotiating supplier trading terms, and enabling online fulfilment through all stores which is strengthening our operating leverage and inventory utilisation,” he said.

“We’ve also been focused on expanding our newly established New Zealand team to drive growth in that market.”

Baby Bunting has also revealed a rollover of an existing $70m debt facility with National Australia Bank to September 2027, which was due to expire in March next year.