Baby Bunting has reported a 12.2% increase in in-store sales for the first half of FY23, now representing 80% of total sales.
The baby retailer, which stocks apparel from Bonds and Disney, saw eCommerce sales drop as a total of percentage of sales from 23.8% to 19.7%.
Touchless Click & Collect also fell in the first half by 30.2% compared to prior corresponding period, as consumers revert to pre-pandemic shopping behaviours.
However, it is still up by around 225% over a three year period.
Baby Bunting's pro forma net profit after tax was at $5.1 million, down 59% on the prior corresponding period (1H FY22), with total sales being 6.6% higher ($254.9 million) than prior period.
Baby Bunting CEO & MD Matt Spencer said its sales have grown by 36.7% over the last three years, noting that all Baby Bunting stores remained open during the pandemic.
“As life has normalised, the market share gains made through COVID have predominantly been held onto,” Spencer said.
“Post-COVID, our product segment performance is normalising. Nursery essentials – being a core category – continue to grow strongly and were up 12.7% in the half (over three years, this category is up 39.4%).
“Consumer staples, which are more widely available across general retail, saw a decline of 4.7%. Play time items (including Play gear) declined 3.6% in the half, reflecting price deflation and reduced demand after the pandemic.”
Meanwhile, Baby Bunting is driving investments into new markets, reporting a pro forma cost of doing business of 32.4% of total sales - an increase of 222 basis points on the prior corresponding period. It also cited significant wage inflation as contributing factor for the rising cost of doing business.
The company is preparing to launch its Baby Bunting Marketplace (to be available via its eCommerce site) in Q4 FY23, saying it presents a significant revenue opportunity. Baby Bunting said it is working with a number of suppliers to develop the offer, as it plans to launch the marketplace with 1,000 additional products.
The company also implemented a new advanced order management system and a time and attendance system, incurring a $2.2 million cost. Baby Bunting said that benefits are being realised from improvement in order management, and its ERP/POS replacement project is expected to move to vendor selection towards the end of FY23.
The company also added five new stores to its portfolio in the first half of FY23, including the expected launch of its second New Zealand store in Christchurch to open mid-2023. New Zealand is a relatively new market for the brand having only opened its first store there in mid-2022.