Shares of Baby Bunting surge by 9 percent in a single day as Bundle of Joy shakes the market

August 20, 2024 TruthUSA

Baby Bunting announced a robust start to the 2025 financial year along with a new growth strategy.

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

The positive outlook for the next financial year resulted in a 9 percent increase in shares of the baby product company on Aug. 19.

Baby Bunting, an Australian and New Zealand retailer, offers products for babies and young children such as prams, feeding and nursing essentials, clothing, toys, furniture for the baby’s room, and baby monitors.

The company reported a 3.5 percent growth in total sales and a 2 percent increase in comparable sales in the first seven weeks of the 2025 financial year.

Additionally, Baby Bunting is on track to achieve a 40 percent gross margin for the 2025 financial year.

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

However, the statutory net profit after tax in FY24 was $1.7 million, down 82.8 percent from FY23. The company achieved a group EBITDA of $15.9 million with an EBITDA margin of 3.2 percent.

In the fourth quarter, the gross profit percentage was 37.3 percent, which represented a 19 basis points increase from the previous year.

Momentum Grows, Sales Improve

Baby Bunting CEO Mark Teperson expressed satisfaction with the positive momentum and improved store sales since May.

He highlighted the early success of the strategic growth initiatives announced during the Investor Day in June 2024, resulting in positive trading and financial performance.

Teperson emphasized the positive change in store sales trajectory since May, the improvement in gross profit margin achieved in July 2024, and the company’s commitment to implementing its growth strategy.

Baby Bunting reported total sales of $498.4 million in FY24, with 21.8 percent coming from its online platform. Furthermore, over 90 percent of sales were from loyal customers, boasting 800,000 active loyalty customers.

Chair Melanie Wilson acknowledged the challenges faced in a tough economic environment and highlighted the company’s focus on growing market share, enhancing EBITDA, and improving return on invested capital.

Reporting Season Continues

Bubs Australia and A2 Milk are two other infant product companies listed on the Australian Stock Exchange.

Bubs reported a net revenue of $81.1 million in FY24, a 35 percent increase from the previous year.

Bubs CEO Reg Weine shared the company’s positive performance, surpassing the revenue guidance of $80 million.

On the other hand, A2 Milk saw a nearly 19 percent drop in shares following its financial results on Aug. 19, rebounding slightly by 0.7 percent the next day.

A2 Milk pointed out the decline in the Chinese infant milk formula market by 8.6 percent in volume and 10.7 percent in value during FY24.

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