‘Whimsical’ store updates deliver for baby stuff seller
Baby Bunting’s initiative to reimagine the way parents shop for their children is paying off, with sales growth in the first half beating forecasts.
Australia’s largest retailer of specialist baby products increased sales by 6.7 per cent in the six months to December 29 to $271.4 million.
Net profit increased by 4.1 percent compared to the same period in the previous half year, reaching 5 million dollars.
Same-store sales rose 4.7 percent, beating expectations for comparable sales growth of 2 to 3 percent, while sales at Baby Bunting’s nine “stores of the future” rose 25 percent, topping expectations.
That momentum continued into the second half, with same-store sales rising 6.7 percent in the seven weeks to Sunday.
Chief executive Mark Teperson said it was a strong result that exceeded expectations on multiple metrics and demonstrated strong momentum in its strategy.
“Our record revenue result was driven by growth in our customer base, the continued success of our store of the future program and strong gross margin performance,” he said.
Baby Bunting’s “stores of the future” feature storefronts of Baby Bunting’s partner brands, as well as experience centers where parents can interact, learn and shop.
There are also spaces like a “whimsical glass bottle canopy” designed to evoke a sense of wonder, and calming spaces that will evoke a friend’s kitchen.
After three stores pioneered the concept in 2024/25, a further six Baby Bunting stores were refurbished and converted to the future format during half-term.
Baby Bunting also opened three small-format stores in shopping malls on the Gold Coast and suburbs of Melbourne and Adelaide in the last few months of 2025, but they did not have much success.
Mr Teperson said one of the BabyBunting Junior stores was performing on target, while two were slightly behind.
“We are large-format destination retailers,” he said on a conference call with analysts.
“As we moved into the mall environment, we realized there were some subtleties in executing how we could convert more passing traffic into in-store shoppers.”
Stores are showing signs of recovery, but tentative plans to open two or three more small-format stores are on hold for the remainder of the second half.
Baby Bunting finished the half with 74 stores in Australia and five in New Zealand.
It plans to renovate six more stores as “stores of the future” in the second half; This involves closing them for 10 to 12 weeks and opening two new large format stores on the NSW Central Coast and in suburban Melbourne.
RBC Capital Markets analyst Jackie Moody said Baby Bunting’s future store program delivered strong sales growth, but first-half profit narrowly missed expectations.
Ms Moody noted the retailer’s capital expenditure forecasts for 2025/26 had risen by 29 per cent to $41 million to $43 million.
Baby Bunting said it will not pay dividends as it focuses on growth.
In morning trading, Baby Bunting shares rose 11.8 percent to $2.46, a three-week high.
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