Baby Bunting says consumer demand softens; CEO plans to step down

(Source: BabyBuntingAus/Facebook)

Specialty baby goods retailer Baby Bunting has reported a dramatic slump in its interim profits as consumers return to pre-pandemic shopping behaviours.

As the company released its half-year trading results, the company announced CEO and MD Matt Spencer would stand down later this year after 11 years with the business.

For the six months to December 26, sales grew 6.6 per cent to $254.9 million while tax-paid profit fell 67 per cent to $2.7 million.

In-store sales grew 12.2 per cent driven by growth in the core category of nursery essentials which comprised 80 per cent of revenue. Meanwhile, online sales increased by 6.5 per cent and contributed 19.7 per cent to total revenue, while click-and-collect turnover fell by 30.2 per cent.

Spencer said gains in market share made during the pandemic have predominantly been held.

“Post-Covid, our product segment performance is normalising. Nursery essentials – being a core category – continued to grow strongly, up by 12.7 per cent during the half.”

Sales of consumer staples – which are more widely available across general retail – declined by 4.7 per cent, while playtime items (including play gear) declined 3.6 per cent during the half, reflecting price deflation and reduced demand after the pandemic, said Spencer.

The retailer opened five new stores during the period and is set to launch the Baby Bunting Marketplace during the fourth quarter.

The retailer has also announced plans for leadership renewal after Spencer steps down towards the end of the year.

Chair Melanie Wilson thanked Spencer for his tenure, highlighting his “leadership and integrity and the instrumental role he has played in the company’s transition to an ASX-listed company”.

Spencer said it was a hard decision to leave, but he believes it is the right time to commence the transition as Baby Bunting moves into its next phase of growth.

“It has been incredibly humbling to be part of the Baby Bunting team over the past 11 years. I have
loved coming to work each and every day.”

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