Insights

Baby Bunting (ASX:BBN) share price drops following trading update

Baby Bunting has updated the market on its performance…
The post Baby Bunting (ASX:BBN) share price drops following trading update appeared first on The Motley Fool Australia. –

The Baby Bunting Group Ltd (ASX: BBN) share price is on the move this morning.

At the time of writing, the baby products retailer’s shares are down 1.5% to $5.45.

Why is the Baby Bunting share price falling?

Investors have been selling down the Baby Bunting share price today following the release of a trading update at its annual general meeting (AGM).

According to the release, Baby Bunting’s comparable store sales are down 1.3% year to date to 3 October. However, if you exclude its ACT and NSW stores, comparable store sales would have been up 4.7%.

And while it hasn’t been enough to stop the Baby Bunting share price from falling, this update is actually a big improvement on its performance earlier in FY 2022.

Baby Bunting’s CEO, Matt Spencer, commented: “When we last updated the market on 13 August, comparable store sales were negative 6.4% for the first 7 weeks of the year. Since then, we have seen a positive trend in comparable store sales growth, despite the ongoing lockdowns experienced across Victoria, NSW and the ACT.”

“From week 7 to week 14, we have seen positive comparable sales growth of 3.2% which takes us to a negative 1.3% comparable store sales performance year-to-date. If you exclude our NSW and ACT stores, since week 7 we have experienced comparable store sales growth of 10.0% with a year-to date comparable store sales growth of 4.7%.”

What else did the company say?

Also failing to give the Baby Bunting share price a lift was its online sales growth. The company reported strong online sales growth despite cycling a period of explosive growth a year earlier. The release explains that online sales (including click & collect) are up 37.7% year-to-date. During the prior corresponding period, its online sales rose 126%.

Another positive is that the company’s margins continue to widen. Baby Bunting reported a gross profit margin up 120 basis points to 38.7% year-to-date. This has been supported by strong private label and exclusive product sales. Private label and exclusive products make up 44.3% of sales year-to-date. This is up from 38% in the prior corresponding period and brings it closer to its long term goal of 50% of sales.

Looking ahead, the company expects to open 6 to 8 new stores in Australia in FY 2022, and two in New Zealand towards the end of FY 2022.

Management also revealed that the transformation program is progressing well. It is anticipating the launch of its new Australian website and phase 2 of its loyalty program in early November.

Due to COVID-19, no guidance was given at the AGM.

Mr Spencer explained: “Governments are progressing along their roadmaps for re-opening which is a positive. Nevertheless, there remains uncertainty about the business and trading conditions that will prevail in different parts of Australia. Accordingly, guidance for the rest of the year ahead cannot be given at this time.”

The Baby Bunting share price is up 12% in 2021.

The post Baby Bunting (ASX:BBN) share price drops following trading update appeared first on The Motley Fool Australia.

Should you invest $1,000 in Baby Bunting right now?

Before you consider Baby Bunting, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Baby Bunting wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Top brokers name 3 ASX shares to buy today

Top brokers name 3 ASX shares to buy today

Baby Bunting (ASX:BBN) share price surges higher on broker upgrade
Why Atlas Arteria, Baby Bunting, De Grey Mining, & New Hope are pushing higher

2 strong ASX retail shares that could be buys

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Baby Bunting. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!