Baby Bunting Group (BBN) Investor Day 2024 summary

Strategic direction and growth initiatives

• Targeting a return to growth with a plan focused on market share expansion, EBITDA growth, and improved return on invested capital.

• Aims for a 10%+ EBITDA margin and 40% gross margin in FY25, with a medium-term goal of 42%.

• Plans to double private label share from 10% to 20% and scale exclusive brand agreements, including multi-year exclusivity with Nuna and Bugaboo.

• Store network expansion includes piloting small format stores, refurbishing existing stores, and targeting 110+ stores in Australia and 10+ in NZ.

• Investment in data analytics, digital capability, and a new ERP/POS system to drive operational efficiency and customer engagement.

Financial guidance and capital management

• Reaffirmed pro forma NPAT guidance of AUD 2–4 million for FY24 and FY25, with a renewed AUD 70 million NAB facility to September 2027.

• FY25 CapEx program of AUD 10–13 million, funded from operating cash flow, focused on store refurbishments, new formats, and digital investments.

• Gross margin improvement driven by price architecture simplification, loyalty program changes, supplier renegotiations, and exclusive/private label growth.

• Inventory productivity initiatives include de-ranging underperforming SKUs and optimizing stock by store size and performance.

• Disciplined capital allocation with potential acceleration of store refurbishments if pilot results exceed expectations.

Business model evolution and competitive positioning

• Leveraging omnichannel strengths, with all stores enabled for online fulfillment, boosting inventory productivity and customer convenience.

• Launching a new media business to monetize retail and digital assets, expected to unlock high-margin revenue.

• Store redesigns shift from category-led to activity-led layouts, enhancing customer experience and driving comp sales growth.

• Focus on expanding soft goods and consumables to increase transaction frequency and margin, while maintaining a market-leading range in hard goods.

• Ongoing supplier collaboration to reduce costs, secure exclusives, and support innovation, with a strong emphasis on partnership and mutual growth.