Despite current economic conditions, it seems those who want babies are going to have babies and that's good news for Baby Bunting.
Baby Bunting Ltd (ASX:BBN) has delivered a 33.9% increase in pro forma net profit after tax (NPAT) to $16.1 million for FY26, supported by record sales, higher margins and continued gains from its store refurbishment strategy.
Total sales for the year ended June 28, 2026, rose 6.5% to a record $556.0 million, while comparable store sales increased 3.5%. Gross margin expanded by 100 basis points to a record 41.2%.
Statutory NPAT increased 17.5% to $11.2 million from $9.5 million in FY25.
Those figures saw the company's shares rise over 20% in morning trading (22.4% at 11am).
Store strategy drives growth
Baby Bunting's Store of the Future program remained a key contributor, with 12 refurbishments completed during FY26 and 15 refurbished stores now operating across the network.
Those stores delivered an 18% sales uplift after reopening, while maintaining a payback period of less than three years.
The company also opened four large-format stores and three Baby Bunting Junior small-format stores during the year.
Online sales increased 16.7% and accounted for 25.3% of total sales, compared with 23.1% in FY25, while higher-margin softgoods sales grew 12.9%. Gross profit rose 9.3% to $229.2 million.
Exclusive and private-label products now represent more than half of group sales, while BabyBuntingMedia generated $5.8 million in revenue during the year. Baby Bunting also signed a 3-year exclusive partnership with premium children's brand Stokke.
CEO Mark Teperson said the result reflected “disciplined execution” despite pressure on consumer spending from higher interest rates and fuel prices, with the company recording 54% NPAT growth in the second half.
FY27 outlook points to further earnings growth
Trading has strengthened into FY27, with total sales up 6.1% and comparable store sales 4.3% higher over the first six weeks to August 9.
Australian comparable sales increased 3.9%, while New Zealand delivered 15.0% comparable growth.
Baby Bunting expects FY27 pro forma NPAT of between $19.0 million and $21.0 million, based on total sales of $585 million to $600 million, comparable store sales growth of 3% to 5% and a gross margin of 42%.
Capital expenditure is forecast at $33 million to $37 million and is expected to be fully funded through operating cash flow.
Next steps
The group plans to complete a further 10 to 12 Store of the Future refurbishments in FY27, including 5 to 6 in the first half, alongside the opening of 3 new large-format stores.
New Zealand is also expected to reach break-even during FY27.
Baby Bunting finished FY26 with net debt of $16.2 million and more than $60 million of funding headroom. The board has elected not to pay a final dividend as it continues to fund the group's growth strategy.