Baby Bunting Group Limited (ASX:BBN) Reports Strong 1H FY25 Results
Financial Performance
Baby Bunting Group Limited reported a Pro Forma Net Profit After Tax (NPAT) of $4.8 million for 1H FY25, a 37% increase from $3.5 million in the prior period. Total sales reached $254.4 million, up 2.4%, supported by a 2.2% growth in comparable store sales. The gross margin improved to 39.8%, up 260 basis points, on track to meet the FY25 target of 40%.
Operational Achievements
The Group opened two new stores in Australia and relocated one, bringing the total to 75 stores. The store refurbishment program progressed significantly, with three new store formats set to launch in the second half of FY25. Inventory management saw a reduction of $2.6 million in comparable stores, offset by a $1.6 million investment in new stores.
Future Outlook
Baby Bunting reiterates its FY25 guidance of a Pro Forma NPAT between $9.5 million and $12.5 million. The outlook includes expectations of comparable store sales growth between 0% to 3% and achieving a gross margin of 40%. Capital expenditure is estimated between $10 million and $13 million, funded through operating cash flow.
Dividend Declaration
The Board has decided not to pay an interim dividend to support the Group’s capital expenditure and growth initiatives.
Executive Comments
CEO Mark Teperson stated, “We are pleased to report a strong 1H FY25 result, demonstrating good execution of our growth strategy in the context of a challenging consumer macroeconomic environment. Our focus on driving sales through range innovation and new customer acquisition is delivering results. Newness in our ranges continues to resonate, with new customer acquisition up 12% on the prior period. Our exclusive branded products remain a key traffic driver and, with a strong pipeline of exclusive launches in the second half, we expect this momentum to continue. Alongside sales growth, we have also delivered margin expansion in a retail environment where margins are under pressure.”
Motley Fool contributor Matt Burgess has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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