Baby Bunting Group Limited has reported a significant decline in profitability for the year ending June 30, 2024. The company’s statutory net profit after tax (NPAT) was $1.7 million, down 82.8% from the previous fiscal year’s $9.9 million. The pro forma NPAT also fell by 74.7% to $3.7 million from $14.5 million in FY23. Total sales decreased by 3.4% to $498.4 million, and comparable store sales declined by 6.3% during the year.

The Board decided against declaring a final dividend, choosing instead to conserve cash for capital expenditure and growth initiatives. CEO Mark Teperson expressed optimism about the company’s future, noting improvements in comparable store sales since May and a 180-basis point improvement in Gross Profit Margin in July 2024.

“While it is still early days, it is pleasing to see the implementation of the strategic growth initiatives that we announced as part of our Investor Day in June 2024 starting to deliver positive momentum in our trading and financial performance.” Teperson said.

The company’s key priorities include renegotiating trading terms with key suppliers, redesigning store format, rolling out new stores and refurbishments, and continuing progress on range innovation and exclusive brand offerings.

“We remain focused on continuing to implement our strategy and maintaining the positive momentum achieved over the past three months. Our key priorities for the rest of the financial year are completion of trading terms renegotiations with our key suppliers, which is progressing well, redesign of our store format due to be launched in market end of Q3, the phased roll-out of new stores and refurbishments in 2H FY25 and continuing the progress we have made to date on range innovation and exclusive brand offerings.” Teperson added.

“The company has seen improvements in its sales trajectory since May 2024, with a total sales growth of 3.5% in the first seven weeks of FY25, bolstered by changes in its go-to-market strategy. Notably, July 2024 gross profit margin improved by 180 basis points, reaching 36.8%, largely due to simplified pricing and the removal of the Loyalty Spend & Earn program.” Teperson noted.

Baby Bunting anticipates FY25 pro forma NPAT to fall within the range of $9.5 million to $12.5 million, contingent upon comparable store sales growth of 0% to 3% and a targeted gross profit margin of 40%. The company aims to enhance its market share in the $3.4 billion soft goods market, where it currently holds a 3% share.