Bunting hits big numbers
Rivals’ woes help profit for baby goods retailer
BABY Bunting has taken advantage of the collapse of competitors including Babies R Us to lift its full-year profit 43 per cent to $12.4 million.
Shares in the one-stop baby shop surged more than 10 per cent yesterday after it hiked its fully franked final dividend by 2.6 cents to 5.1 cents on the back of the big profit jump for the 53 weeks to June 30.
The rise from $8.6 million came on a 21 per cent lift in revenue to $368 million, with private label and exclusive products representing 27.6 per cent of pro forma sales.
The company said that was up by more than half on the prior year, making it well placed to meet its long-term target of 50 per cent of sales s from this pipeline.
The retailer has been focused on capturing market share left by the likes of Babies R Us after its owner, Toys R Us, went into administration last year.
Baby Bounce also shut 10 stores in NSW and Queensland in June last year, while Baby B b S Savings closed four during the same month.
Chief executive Matt Spencer ( pictured) said the company was quick to jump on real estate opportunities from the closures in popular operating sites.
“We’ve captured about 30 per cent of the market share where there was Babies R Us or Toys R Us stores,” Mr Spencer told investors yesterday.
The retailer opened six new stores across four states this year, bringing its total to 53, with Mr Spencer saying the new stores were trading ahead of historical averages.
However, the big lift in profit was due in part to the previous year’s result being weighed down by heavy discounting across the sector amid the collapse of its competitors.
Stripping out the impact of the additional week in this year’s financial year, pro forma profit rose 58 per cent to $15.14 million, while revenue lifted 19 per cent to $362.33 million.
Despite a rocky period for retailers, Baby Bunting says its online focus is paying off after a 46 per cent increase in online sales compared to the prior corresponding period.