Baby Bunting shares down
Baby Bunting shares have tumbled after the retailer downgraded its fullyear earnings forecast. Chief executive Matt Spencer said market pricing had not stabilised.
BABY Bunting shares have tumbled after the retailer downgraded its full-year earnings forecast.
The baby goods chain yesterday said it expected that excluding employee equity incentive expenses, its earnings this financial year should be similar to the $23 million in the year to June 25.
It previously forecast earnings between $25.3 million and $27 million but abandoned that forecast after prices and profit margins suffered amid challenging market conditions.
Following that, shares in Baby Bunting tumbled more than 10 per cent in early trade yesterday before reclaiming ground to end the session down 5.7 per cent at $1.41.
Chief executive Matt Spencer said market pricing had not stabilised as industry consolidation and aggressive discounting continued.
“Given the challenging conditions in the first four months, we think it appropriate to adjust our (earnings) guidance,” Mr Spencer said.
“Nevertheless, the business is performing well and we believe our strategy is working.”
Stiff competition in the retail sector amid weaker consumer spending and a decline in foot traffic at shopping precincts has affected many players in the broader industry, with several forced into administration over the past year.