Baby Bunting’s Bundle of Joy as Shares Soar 9 Percent in a Day

Stock photo of the feet of a new-born. Fred Dufour /AFP via Getty Images

Baby Bunting is on track to achieve a 40 percent gross profit margin in the 2024 financial year.

News of a positive outlook in the next financial year also pushed shares of the baby product company up 9 percent on Aug. 19.

Baby Bunting is an Australian and New Zealand retailer of products for baby’s and young children including prams, feeding and nursing, clothing, toys, prams, furniture for the baby’s room, and baby monitors.

It reported the first seven weeks of trade had seen a 3.5 percent total sales growth (pdf) and 2 percent comparable sales growth in the 2025 financial year.

Further, the company noted it was on track to achieve a 40 percent gross margin for the 2025 financial year.

The company reported a pro forma net profit after tax of $3.7 million (US$2.5 million) in the 2024 financial year (FY24), which was at the upper end of the guidance of $2 million to $4 million.

However, statutory net profit after tax in FY24 was $1.7 million, down 82.8 percent on FY23. The company reported a group earnings before interest, taxes, depreciation, and amortization (EBITDA) of $15.9 million with an EBITDA margin of 3.2 percent.

In the fourth quarter, the gross profit percent was 37.3 percent, which was up 19 basis points on the prior corresponding period.

Momentum Grows, Sales Improve

Baby Bunting CEO Mark Teperson reflected on the company’s positive momentum and better store sales since May.

“While it is still early days, it is pleasing to see the implementation of the strategic growth initiatives that we announced as part of our Investor Day in June 2024 starting to deliver positive momentum in our trading and financial performance,” he said.

“Of note has been the improvement in trajectory of our comparable store sales since May, reflecting the change in our go-to-market strategy and the 180-basis points improvement in our gross profit margin achieved in July 2024 following simplification of elements of our pricing structure.

“We remain focused on continuing to implement our strategy and maintaining the positive momentum achieved over the past three months.”

Baby Bunting reported $498.4 million of sales in FY24, of which 21.8 percent was through its online platform.

More than 90 percent of sales were from loyalty customers, with 800,000 active loyalty customers on the books.

Chair Melanie Wilson said the financial results for the year reflected the challenges they have been working through in a “difficult economic climate.”

Wilson highlighted the company’s new strategy is built on growing market share, boosting EBITDA, and improving return on invested capital (pdf).

“Baby Bunting has a great foundation on which to build, and we are focused on driving the success of the business. Our strategy is one that we believe will deliver sustainable shareholder value,” she said.

Reporting Season Continues

Bubs Australia and A2 Milk are two other companies on the Australian Stock Exchange that provide infant products.

Bubs reported a net revenue (pdf) of $81.1 million in FY24, up 35 percent higher from the previous year.

CEO Reg Weine said it had been a positive year for Bubs, with the company delivering a better result than the revenue guidance of $80 million.

Meanwhile, A2 Milk shares plunged nearly 19 percent on the market on the back of financial results on Aug. 19 before edging up 0.7 percent the next day.

A2 milk noted the Chinese infant milk formula market fell 8.6 percent in volume and 10.7 percent in value in FY24.