Baby Bunting shares have been hit by the retail crunch
Health & Biotech
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Baby Bunting shares fell hard after a profit downgrade by the baby goods group due to increased retail competition.
The shares (ASX:BBN) were down 9 per cent to $1.36 in Monday afternoon trade.
“Given the challenging conditions in the first four months, we think it appropriate to adjust our guidance,” Baby Bunting chief Matt Spencer told shareholders.
“Nevertheless, the business is performing well and we believe our strategy is working.
“We introduced everyday low pricing on our core range of car seats into the market in late July which has seen us grow market share.”
Australian retail sales have been tumbling, squeezing margins at traditional stores also under threat from digital players such as Amazon.
This year’s EBITDA earnings would be about the same as the $23 million the group reported in 2017 — down from previous guidance of between $25.3 million and $27 million.
Like for like sales growth was expected to be 4 per cent.
Baby Bunting blamed aggressive discounting among competitors and “supply issues with a leading car seat supplier”.
This has adversely affected sales by about $2 million.