Baby Bunting chair and non-executive director Melanie Wilson has reported that pressure on discretionary spending and affordability remains.
Wilson said the baby retailer’s year-to-date total sales performance has seen total sales down 3.3% against the corresponding period last year, where total sales was 12%.
Comparable store sales are down 8.5%, cycling a positive 7.6%, while Baby Bunting’s gross profit percentage was 37.9%, up 70 basis points compared to the prior corresponding period.
The recent trading comes after a volatile FY23, with Wilson saying conditions had worsened for Australian retailers as the year progressed.
“Trading conditions were volatile, which saw impacts to gross profit margin in the first quarter, as well as difficult retail trading conditions in the second half with consumer sentiment turning negative as cost of living pressures became more prominent in the final quarter of the year,” she said. “This impacted sales and profit and Baby Bunting finished at a level below our expectations for the year.
“We have undertaken actions to optimise our cost structure which have included restructuring our Store Support Centre and implementing measures to counter cost inflation.
“The Baby Bunting brand continues to be the strongest in the Australian nursery sector and our plans for the year ahead will see us focused on providing great value and range to our customers while also looking to the future growth of the organisation.”
Meanwhile, its administration costs have been reduced by $1.7 million against the prior corresponding period, which Wilson said reflected management’s focus on cost management initiatives.
“We anticipate opening five new stores in the year, including the recently opened Cranbourne store, and we will add a further Queensland store at Maroochydore,” Wilson said.
“Excitingly, in New Zealand, we will be adding three new stores – with stores in the Auckland area at Sylvia Park and Manukau, plus a store in the South Island at Christchurch.”