Baby Bunting Group Provides FY2018 Earnings Update

As previously flagged in the Company’s announcement of 10 April 2018, two competitors have recently entered external administration. These competitors were the third largest (Baby Bounce) and equal fourth largest* (Baby Savings) specialty baby goods retailers.

Baby Bunting’s sales and gross margin performance has been adversely affected both in the lead up to and since these competitors entered administration. After comparable store sales growth of 4.7% in Q3, we have seen comparable store sales of negative 2.5% in the first 6 weeks of Q4, driven by a higher level of market discounting and reduced transactional volumes as competitors liquidate stock

Baby Bunting now expects FY2018 EBITDA (excluding employee equity incentive expenses) to be in the range of $18 to $20 million, assuming no further material changes to market conditions.

Year to date total sales have grown 9.6% with transactional growth of 13.1%. Comparable store sales are flat year-on-year, with comparable store transaction growth of 2.7% year to date.

Matt Spencer, CEO and Managing Director said “What we have seen in the industry during this financial year in terms of the extent of consolidation is unprecedented. While challenging in the short term, these changes in market conditions present some great opportunities for the growth of Baby Bunting’s business and profitability in FY2019 and beyond.”


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