Baby Bunting Group delivered a 6.5% revenue rise to $556 million in FY26, alongside a 33.9% jump in pro forma net profit after tax, driven by its Store of the Future refurbishments and margin expansion.
- Pro forma NPAT up 33.9% to $16.1 million
- Record sales of $556 million, 6.5% growth
- Gross margin expands 100 basis points to 41.2%
- Store network grows to 80 with new formats
- Inaugural climate-related disclosures published
Robust Earnings Growth Despite Consumer Headwinds
Baby Bunting Group Limited (ASX:BBN) posted a solid set of FY26 results, with pro forma net profit after tax (NPAT) soaring 33.9% to $16.1 million on record revenue of $556 million, up 6.5% year-on-year. Statutory NPAT also rose 17.5% to $11.2 million, reflecting the company’s underlying momentum despite a more cautious consumer environment marked by rising interest rates and fuel prices in the second half.
CEO Mark Teperson highlighted the resilience of the business, noting a 54% NPAT growth in the second half alone. The company’s strategic focus on refurbishing stores and expanding exclusive and private label product ranges underpinned this performance, with gross margin reaching a record 41.2%, up 100 basis points from the prior year.
Store of the Future Program Drives Sales and Margin
The Store of the Future refurbishment program remains the cornerstone of Baby Bunting’s growth strategy. Twelve stores were refurbished during FY26, bringing the total refurbished fleet to 15. These stores delivered an average 18% sales uplift since reopening, validating the investment with a payback period under three years.
Alongside refurbishments, the company opened four new large format stores and piloted three small format Baby Bunting Junior stores targeting time-poor parents in shopping centres. The network now totals 80 stores across Australia and New Zealand, with plans to exceed 110 large format stores in Australia.
Private Label and Retail Media Enhance Margins
Baby Bunting’s private label and exclusive brands now constitute over 50% of total sales, contributing significantly to margin expansion. The company also launched BabyBuntingMedia, a retail media business that generated $5.8 million in FY26, providing a capital-light, high-margin revenue stream.
In February 2026, Baby Bunting secured a three-year exclusive partnership with premium children’s brand Stokke, further strengthening its exclusive brand portfolio alongside Nuna and Bugaboo.
Digital and Omnichannel Growth
Online sales grew 16.7% to represent 25.3% of total sales, supported by enhancements such as fulfilling all online orders from stores and an in-store endless aisle service that allows customers to order the full online range while shopping in-store. Active customer numbers rose 4.2% to 862,000, with omnichannel customers (shopping both online and in-store) increasing to 43.2%.
Financial Position and Capital Management
Baby Bunting ended FY26 with net debt of $16.2 million, up from $4.5 million the previous year, reflecting $44.5 million of capital expenditure primarily on refurbishments and new stores. The company has a $90 million working capital facility with NAB, providing ample headroom for growth.
In line with its disciplined capital approach, the Board elected not to pay a dividend for FY26, prioritising reinvestment into growth initiatives.
Leadership Changes and Governance
The company strengthened its executive team with key appointments including Jessica Kahanoff as Executive Head of Property, Hannah Styles as General Manager – Merchandise and Planning, and Siobhan Pelc as General Manager – People and Culture. CFO Darin Hoekman announced his intention to step down after 12 years, with a successor search underway.
The Board also noted the upcoming retirement of long-serving Director Gary Levin at the 2026 AGM, with plans to appoint a new Non-Executive Director to maintain governance strength.
Inaugural Climate-Related Disclosures
For the first time, Baby Bunting published a Sustainability Report aligned with the Australian Accounting Standards Board’s AASB S2 Climate-related disclosures. The report outlines the Group’s governance, strategy, risk management, and metrics related to climate risks and opportunities.
Physical climate risks identified include heat and precipitation stress affecting store operations, while transition risks focus on changing stakeholder expectations and supplier cost pass-through. The company reported Scope 1 and 2 greenhouse gas emissions totaling 6,823 tonnes CO₂-e for FY26 and is developing a climate roadmap with formal emissions targets expected in FY27.
Management assesses the Group’s strategy as resilient under both low and high emissions scenarios, leveraging its leased store network, omnichannel capabilities, and diversified supply chain to mitigate risks.
Outlook and FY27 Guidance
Baby Bunting enters FY27 with strong momentum, targeting pro forma NPAT of $19.0 million to $21.0 million on expected sales between $585 million and $600 million. Comparable store sales growth is forecast at 3% to 5%, with gross margin anticipated to reach 42%. Capital expenditure is guided at $33 million to $37 million, fully funded from operating cash flow.
The company plans 10 to 12 store refurbishments in FY27, alongside three new large format store openings. Early trading in FY27 shows a positive start with a 4.3% comparable store sales increase in the first six weeks.
These results and initiatives position Baby Bunting to continue expanding its market share and improving profitability in a competitive specialty baby goods market across Australia and New Zealand.
Bottom Line?
Baby Bunting’s disciplined execution on store refurbishments, margin expansion, and digital growth underpins a confident FY27 outlook, though execution risks around refurbishment disruptions and evolving consumer conditions remain.
Questions in the middle?
- How will Baby Bunting manage sales redirection and customer retention during the accelerated FY27 refurbishment program?
- What impact will CFO Darin Hoekman’s departure have on financial and strategic continuity amid growth initiatives?
- How quickly will Baby Bunting formalise emissions reduction targets and integrate climate considerations into capital allocation?