UPDATE: Baby Bunting Group Ltd (ASX: BBN) is making headlines as its stock rebounds to $2.96 following impressive FY25 results. The leading baby retailer in Australia and New Zealand, operating 75 stores, is poised for further significant growth in the upcoming financial year.
In a recent announcement, Baby Bunting reported a remarkable 4.7% increase in sales, reaching $521.9 million, along with a staggering 228% growth in underlying net profit to $12.1 million. The company also celebrated a 462% rise in statutory net profit, climbing to $9.5 million. These figures highlight the company’s recovery from previous challenges, including fierce competition and reduced profit margins.
The financial year FY26 is already off to a strong start for Baby Bunting. In the first six weeks, total sales surged by 4.8%, with Australian comparable sales increasing by 3.7% and New Zealand comparable sales skyrocketing by 13.9%. This robust performance, combined with an anticipated gross profit margin of 41% for FY26, signals promising prospects ahead.
Baby Bunting plans to expand its footprint, aiming to open five new large format stores and three small format pilot stores in the first half of FY26, with potential for an additional two to three based on pilot success. The long-term strategy includes approximately 80 additional stores, which could enhance profit margins significantly.
As for profits, Baby Bunting estimates an underlying net profit of $17 million to $20 million for FY26, indicating at least 40% year-over-year growth. Analysts from Commsec project earnings per share (EPS) could reach 13.1 cents in FY26, 18 cents in FY27, and 22.4 cents in FY28, suggesting the stock is currently trading at a multiple of 22x FY26’s estimated earnings and 13x FY28’s estimates.
This surge in performance not only reflects Baby Bunting’s resilience but also its ability to navigate a recovering market. Investors and analysts alike are closely watching this stock as it continues its upward trajectory.
With these developments, Baby Bunting Group stands as a compelling investment opportunity for those looking to capitalize on the growing baby retail market. Stay tuned for further updates as the company progresses through FY26, a year that promises to be pivotal in its growth story.
