Baby Bunting Group (BBN) H2 2025 earnings summary

Executive summary

• Achieved record sales of $521.9 million, up 4.7% year-over-year, with comparable store sales growth of 4.2%.

• Pro forma NPAT reached $12.1 million, up 228% year-over-year, at the upper end of guidance.

• Gross margin increased 340 basis points to 40.2%, exceeding the 40% target, supported by supplier renegotiations and exclusive brand partnerships.

• Store of the Future refurbishments delivered a 28% sales uplift and 40 basis points higher gross margin than peers.

• Online sales grew 10.8% year-over-year, now 23.1% of total sales, driven by new delivery options and improved checkout.

Financial highlights

• Gross profit rose 14.2% to $209.7 million, with gross margin at 40.2%.

• EBITDA (pre-AASB 16) was $28.2 million, up 76.9% year-over-year, representing 5.4% of sales.

• Return on Funds Employed improved to 12.1%, up 630 basis points.

• Net debt reduced to $4.6 million from $13.0 million at FY24, with strong covenant headroom.

• Inventory at $95.6 million, with improved quality and aging.

Outlook and guidance

• FY26 pro forma NPAT guidance: $17 million–$20 million.

• Full-year comparable store sales growth expected at 4%–6%, with H1 impacted by refurbishments and H2 targeted at 6%–8%.

• Targeting gross margin of 41% and CODB leverage of 30 basis points.

• CapEx of $30–$35 million, fully funded from operating cash flow.

• Plans to refurbish 10–12 stores and open five new large format and up to six small format pilot stores in FY26.