Baby Bunting shares jump 25% as retailer lifts profit outlook

Baby Bunting, Australia's largest specialty retailer of maternity and baby goods, saw its shares jump as much as 25.7% on Friday after the company issued an upbeat profit forecast for the coming financial year.

The Melbourne-based chain reported a 33% rise in pro forma net profit after tax to A$16.1 million for the year ended June 28, helped by stronger sales and improved margins. Total sales climbed 6.5% to a record A$556 million.

For fiscal 2027, the company expects pro forma net profit of A$19 million to A$21 million, supported by continued sales growth, margin expansion, and contributions from its store refurbishment program. It also guided for total sales of A$585 million to A$600 million.

Chief Executive Mark Teperson acknowledged that rising interest rates and higher fuel prices weighed on consumer spending in the second half, but noted the company still delivered a 54% increase in second-half profit.

The retailer flagged an encouraging start to the new financial year, with total sales up 6.1% and comparable store sales up 4.3% in the first six weeks through August 9.

Shares rose to A$1.515, their highest level since June 24, marking the biggest intraday gain since August 15 last year. Despite the rally, the stock remains down more than 50% year-to-date.

Analysts at Citi said the guidance and trading update would likely come as a relief to shareholders, given how weak the stock had traded over the past year.