Baby Bunting’s Revenue Hits $271M, Statutory Profit Drops 52.5%

Revenue Growth Amid Profit Pressure

Baby Bunting Group Limited has delivered a solid 6.7% increase in revenue for the half-year ended 29 December 2025, reaching $271.4 million. This growth was driven by strong sales across its Australian and New Zealand store networks, as well as an 18% uplift in online sales supported by enhanced digital marketing and expanded store-based fulfilment.

However, the company’s statutory net profit after tax (NPAT) took a significant hit, falling 52.5% to $1.85 million. This sharp decline was largely attributed to non-cash equity incentive expenses and transformation project costs related to upgrading Baby Bunting’s technology platforms.

Underlying Earnings Tell a Different Story

When adjusting for these one-off and non-cash items, Baby Bunting’s pro forma NPAT actually rose by 4.1% to $5.01 million. The adjustments included $4.37 million in employee equity incentive expenses and $191,000 in transformation project expenses, partially offset by tax impacts.

Gross margin improved by 124 basis points to 41.0%, reflecting better supplier terms and ongoing margin management initiatives. Private label and exclusive products now represent nearly half of total sales, underscoring the company’s focus on differentiated offerings.

Store Network Expansion and Innovation

Baby Bunting continued to invest in its physical footprint, refurbishing six stores under its Store of the Future program and launching a pilot of smaller format ‘Baby Bunting Junior’ stores in three locations. The group opened two new stores in Dubbo (NSW) and Westgate (NZ), while closing two others, including Hornsby (NSW) and Bentleigh (VIC), with plans to open a replacement store in Mentone (VIC) early in 2026.

The company also launched a new Retail Media business in December 2024, which is performing in line with expectations and adding a fresh revenue stream.

Cost Pressures and Dividend Policy

Operating expenses rose due to store openings, refurbishments, and wage inflation, pushing the pro forma cost of doing business to 35.7% of sales, up 138 basis points. Store closure and refurbishment costs amounted to $3.16 million during the period.

Reflecting a cautious approach to balance sheet management amid these investments and cost pressures, the Board decided not to pay an interim dividend for 2026.

Outlook and Market Position

Baby Bunting remains Australia’s largest speciality retailer for maternity and baby goods, with a network of 78 stores across Australia and New Zealand. The company’s focus on exclusive products, improved gross margins, and new revenue streams positions it well for future growth, although the impact of ongoing transformation projects and cost inflation will be key factors to watch.