Australian retailer Baby Bunting has reported a 4.7 per cent lift in total sales for FY25, buoyed by retail upgrades and a category expansion in soft goods.
Baby Bunting sells a range of products for babies and toddlers, including hard goods across prams and cots, and soft goods such as toys and clothing.
With sales at $521.9 million in FY25, the retailer hit a gross margin of 40.2 per cent, up 340 basis points compared to FY24.
Baby Bunting’s net profit after tax (NPAT) grew by 228 per cent to $12.1 million.
"We're pleased to deliver a strong FY25 result – with our profit landing at the top end of our guidance range, and a record sales figure – validating the effectiveness of our strategy,” CEO Mark Teperson said.
“Further, in a challenged consumer environment where gross margins have been under pressure, we have delivered 340 bps of improvement, reflecting our disciplined execution. Gross margin of 40.2 per cent was a record for the business.”
Teperson added that the retailer’s ‘Store of the Future’ program has so far exceeded expectations, with customer feedback being “overwhelmingly positive.”
“The three stores we have refurbished have generated, on average, 28 per cent higher sales since they reopened,” he said. “They’ve also achieved gross margin improvement of around 40 basis points above our network performance for July.
“We're excited about rolling our new design out across our network, and we have upgraded our targeted growth rate for refurbished stores to 15 per cent-25 per cent.”
Meanwhile, Baby Bunting’s exclusive and private label brands now represent 47.1 per cent of total sales, up 110 basis points on FY24.
The company’s private label products are housed under the brands of 4baby, JENGO and Bilbi, with two of them producing clothing ranges.
The lift in exclusive and private label sales comes after former chair Melanie Wilson set Baby Bunting on a course to scale in the soft goods category in October last year, before stepping down a month later.
The latest updates from Baby Bunting show the retailer’s soft goods market capitalisation is at 3 per cent, in a market worth $3.4 billion. The retailer’s core competency is in hard goods, with a total market cap of $1.8 million. In hard goods, Baby Bunting purports to hold around 23 per cent.
"Looking ahead, we are excited about our growth trajectory,” Teperson said. “The Store of the Future format provides a clear blueprint for shareholder value creation, and we have a strong pipeline of new store opportunities.
“We continue to see a significant runway for market share growth, particularly in the $3.4 billion soft goods category, where we estimate we currently have just around 3 per cent market share.”
Teperson said the overall result in FY25 positions Baby Bunting as a leader in specialty baby retail in Australia. “We remain committed to our target of achieving greater than 10 per cent EBITDA margins on a pre-AASB 16 basis as we execute our strategic plan."