Baby Bunting Group (BBN) H1 2025 earnings summary

Executive summary

• Pro forma NPAT for 1H FY25 was $4.8 million, up 37% year-over-year, with total sales rising 2.4% to $254.4 million and comparable store sales up 2.2%.

• Gross margin improved by 260 basis points to 39.8%, nearing the 40% target, driven by pricing, supplier terms, and supply chain improvements.

• Strategic initiatives included new store openings, exclusive brand launches, supply chain improvements, and digital innovation, supporting a return to growth.

• No interim dividend declared to prioritize growth investments and capital expenditure.

• Net debt reduced to $9.1 million from $13.0 million at FY24 end, with strong covenant headroom.

Financial highlights

• Gross profit reached $101.3 million, up 9.5% year-over-year, with statutory NPAT up 45.3% to $3.9 million.

• EBITDA (pre-AASB 16) increased 31.8% to $14.0 million; EBITDA margin improved to 5.5%.

• Online sales grew 2.8% year-over-year, now 22–22.4% of total sales; marketplace GMV up 184% to $2.5 million.

• Cost of doing business rose to $87.2 million (34.3% of sales), reflecting new store investments, wage inflation, and marketing.

• Inventory productivity improved with a $2.6 million reduction in comparable store inventory.

Outlook and guidance

• FY25 pro forma NPAT guidance reaffirmed at $9.5–$12.5 million, assuming 0–3% comparable store sales growth and 40% gross margin.

• CapEx for FY25 expected at $10–13 million, fully funded by operating cash flow.

• FY26 to see $2–3 million gross margin contribution from retail media and $1 million annualized cost out in New Zealand.

• Additional "Store of the Future" refurbishments and new Auckland store opening planned by Q4 FY25.

• Outlook assumes stable macroeconomic and retail trading conditions, with no major sea freight cost increases.