The baby goods retailer guides FY27 NPAT to $19-21m after gross margin hit 41.2% and online sales rose 16.7%; comparable sales up 4.3% in first six weeks.
Alpha Score of 65 reflects moderate overall profile with moderate momentum, strong value, moderate quality, moderate sentiment.
Baby Bunting Group (ASX: BBN) lifted pro forma net profit 33.9% to $16.1m in the 2026 financial year on total sales of $556.0 million. Gross margin reached a record 41.2%.
Comparable store sales rose 3.5%, and the Store of the Future refurbishment program delivered an 18% sales uplift in the period after each store reopened. Statutory NPAT, which includes employee equity incentive expenses and certain transformation project costs that the pro forma figure strips out, rose 17.5% to $11.2m. The gap between the two, about $4.9m, is the size of those exclusions.
Online sales increased 16.7% to $140.5m, taking the channel to 25.3% of total sales. Online growth ran well ahead of the 3.5% comparable store gain, and active customers grew 4.2% to 862,000.
Gross profit rose 9.3% to $229.2m. The softgoods category, flagged as higher margin, grew 12.9%, and private label and exclusive products together reached 50.3% of sales, up 320 basis points from a year earlier.
Private label and exclusive products carry higher margins than branded stock and face no direct price comparison on other retailers' shelves. Those two lines are where the margin comes from.
BabyBuntingMedia generated $5.8m of revenue in its first full year. The Stokke exclusive partnership signed during FY26 joins Baby Bunting's existing exclusive brand relationships and will contribute for a full year in FY27.
Cost of doing business reached $191.6m, 30 basis points lower as a share of sales at 34.5%. EBITDA, before the impact of lease accounting, rose 33.4% to $37.6m.
Chief executive officer Mark Teperson said FY26 was "a year of disciplined execution against our strategic plan." Rising interest rates and elevated fuel prices weighed on consumer spending through the second half, he said, hitting some higher-priced prams and car safety categories.
"Even in this more challenging consumer environment, we delivered NPAT growth of 54% in the second half, reflecting the underlying strength of the business," Teperson said.
Baby Bunting completed 12 Store of the Future refurbishments during FY26 and opened three new large format stores. The refurbishments close a store for the full rebuild; once reopened, those stores run 18% ahead on sales. About 1,000 retail trading days were lost to the closures. Three BabyBunting Junior small format pilots also ran during the year.
Average refurbishment build costs fell from $1.7m per store in the first half to $1.5m in the second. The FY27 targets are $1.4m for A and B grade stores and about $1.0m for C and D grade stores. Refurbished stores have kept capital payback under three years and recorded gross margins ahead of peer stores, the basis for plans to refurbish another 10 to 12 stores in FY27, five to six of them in the first half.
The small format rollout has been paused while Baby Bunting refines the pilots. Three new large format stores are planned for FY27, and the New Zealand business is targeting break-even during the year.
Baby Bunting guided to FY27 pro forma NPAT of $19.0m to $21.0m on total sales of $585m to $600m.
The sales midpoint, $592.5m, sits about 6.6% above the FY26 result. Comparable store sales growth of 3% to 5% and a gross margin of 42%, another 80 basis points on top of the 41.2% record, anchor the outlook. At the NPAT midpoint, $20.0m, the result lands about 24% above the FY26 pro forma figure.
Comparable sales in the first six weeks of FY27, through Aug. 9, ran 4.3% ahead, inside the guided range.
Capital expenditure is forecast at $33m to $37m, down from $44.5m in FY26 and expected to be fully funded from operating cash flow. Net debt closed the year at $16.2m after that investment program, with more than $60m of undrawn facility headroom. Cash conversion came in at 96.4% on operating cash flow of $36.2m.
The board will not pay a final dividend, keeping cash inside the business to fund the store rollout and refurbishment program. The next trading update is due at the annual general meeting on Oct. 13.
Drafted by a large language model from the source reporting linked above, then screened by automated publishing checks. It is not read by a journalist before publication. Some articles cite our Alpha Score. Verify prices and figures against the original source. Educational coverage, not personalized advice.