Babywear retailer Baby Bunting Group has reported an unprecedented slump in sales for its key ‘Storktake’ promotional event amid an overall sales growth flatline.
Total sales growth is around 1% and comparable store sales growth is negative 3.0%, as of June 4, 2023.
The key 'Storktake' promotional event, which recently commenced, has seen trading both in stores and online well below expectations during this short period.
“Since launch, sales have been unprecedentedly low, with comparable store sales of around negative 21.0%,” the company noted. “If this trend continues, the Company expects FY23 sales to be in range of $509 million to $513 million and comparable store sales to be negative 4.0% to negative 5.0%.”
As June delivers a larger proportion of the Company’s second-half profit, the company warned that a continuation of the current trend will have a significant impact on the Company’s full-year profit result.
Pro forma net profit after tax (NPAT) is expected to be in the range of $13.5 million to $15.0 million for FY23. This compares to previous guidance of pro forma NPAT in the range of $21.5 million to $24 million.
Baby Bunting noted that its gross margin performance up until the end of May was on track to land within the lower end of its expected full-year gross margin range of 38.0% to 39.0%. The Company now anticipates that the full-year gross margin performance will be moderately below the bottom end of that range.
Its inventory levels are expected to be around $100 million for the year (FY22 $96.7 million). “There is limited exposure to seasonal stock,” the company noted.
Baby Bunting’s Marketplace initiative has recently launched and the Company is now activating the initial third-party seller SKUs on its website. It expects to have over 2,000 third-party SKUs available online by the end of the financial year.