Baby Bunting has revealed profits are down significantly as customers continue to tighten their purse strings.
Baby Bunting has released its FY23 results and after last year’s record profit, 2023 and all its challenges has proven too hard for the company to keep up with.
Sales are up just 1.7 percent on FY22 at $515.8m compared to last year’s $507.3m.
Comparable store sales are down 3.6 percent and Gross Profit is down 118 bps at 37.4 percent.
In June, Baby Bunting revised its guidance in a trading update. The NPAT was expected to be in the range of $13.5 million to $15.0 million for FY23, a significantly lower range than previous guidance of NPAT in the range of $21.5 million to $24 million. The unaudited pro forma NPAT result is towards the upper end of the FY23 guidance provided, at $14.5m. However, compared to last year’s $29.6m, this is down 51 percent. Statutory NPAT came to $9.9m, down 49.5 percent and over $10m on FY22’s $19.5m.
Baby Bunting’s June Storktake promotional event is a key profit driver for the company and this year resulted in sales ‘well below expectations’. Since the event ended, comparable store sales have been negative 9.1 percent.
Acting CEO, Darin Hoekman, said “June is a key promotional period. As previously indicated, the first two weeks of the period saw trading in stores and online well below expectations with comparable store sales of around negative 21 percent. In the final 3 weeks of the promotional period, trading improved as customers responded more positively to our offers, with comparable store sales in the final weeks of the promotion being negative 9.4 percent.”
Inventory levels finished the year at around $98.0 million (FY22: $96.7 million). This total includes $7.3 million of inventory added for the seven new stores opened during FY23 and the New Zealand distribution centre.
Net debt was $6.2 million (FY22: net debt of $0.7 million) at the end of the year and the Group had $58 million headroom in its $70 million banking facility and considerable clearance in its banking covenants.
Upon the results of last month’s trading update, Baby Bunting Group shares dropped more than 20 percent to a five-year low. With today’s results released after close, the impact of these full year results on shares is yet to be seen.