Cradle rocks for Baby Bunting as shares jump 22pc on sales outlook
Health & Biotech
Health & Biotech
Retailer Baby Bunting has bucked the sombre retail environment, jumping 22 per cent today on an improved sales outlook.
The retailer said EBITDA earnings for the year would be in the range of $25 million to $27 million.
That was up slightly on a forecast of $24 million to $27 million issued in August.
Total sales were up 17 per cent to November 15 — a slight bump on the 16.5 per cent figure reported after six weeks.
Comparable sales performance was running at 9.6 per cent to November 15 — down slightly on the 9.8 per cent announced in August.
The performance is encouraging given the tough times Baby Bunting — and other retailers — have faced in recent years.
Even online heavyweight Kogan.com has faced recent sales pressure.
Last year Baby Bunting’s total sales hit $303 million (a 9 per cent increase) while profit was $9.6 million (down 25.9 per cent).
The retailer’s shares jumped 22 per cent to an intraday high of $2.42 before cooling to $2.27 at 11am AEDT:
Baby Bunting chief Matt Spencer told shareholders he was “very pleased” with the group’s comparable sales performance.
“Importantly, we have experienced positive gross margin performance when compared to the prior year and we are on track to achieve our guidance of gross margins exceeding 34 per cent for the year.
“Our online channel continues to grow, with click and collect sales performing particularly well.
“We are experiencing growth in the sales of our private label and exclusive products and we are on track to meet our target of 25 per cent of sales this financial year.
“We anticipate opening a further two new stores prior to Christmas, bringing our store network to 52 stores.
Baby Bunting is holding its Annual General Meeting today.