Baby Bunting plans NZ push as online sales soar | Ralph Lauren

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Maternity and infant goods chain Baby Bunting plans to push into New Zealand after delivering a surge in first-half profit, with online sales doubling in line with the broader retail trend during the COVID-19 pandemic.

The company reported on Friday a 54.7 per cent leap in statutory net profit to $7.5 million after total sales rose 16.6 per cent to $217.3m.

Chief executive Matt Spencer said the results were great, noting Baby Bunting sold essential products for parents and parents-to-be that were less discretionary in nature than others.

“Sales in all channels were up,” Mr Spencer said.

“Our online sales growth in the half was very pleasing, with total online sales including click and collect up 95.9 per cent.”

Click and collect sales rocketed 218 per cent and are now around 55 per cent of all online sales in areas where Baby Bunting has a physical presence.

But the company still considers the store network central, with more than 90 per cent of sales occurring or being completed in stores.

Three opened during the period at Knox in Victoria and Castle Towers and Coffs Harbour in NSW, bringing the total in Australia to 59.

The ambition is to expand the Australian network to more than 100, with a new store at Westfield Belconnen in the ACT due to open in March, and there is potential for another store in the second half, the company says.

In New Zealand, shipping of online orders began in July, and the plan is to open at least 10 stores in the country, with the first expected to open in the 2022 financial year.

Baby Bunting said there was no large format baby specialty retail chains in New Zealand but estimates the market opportunity as being worth $NZ450m ($419.5m).

The company did not seek or receive any JobKeeper support.

“The Baby Bunting team has done tremendously well servicing new and expectant parents in what can only be described as an unusual and difficult time,” Mr Spencer said.

“All up, we have seen some great results, and it continues to be a very exciting time for Baby Bunting.”

The company declared an interim fully franked dividend of 5.8¢ per share, up from 4.1¢ per share previously.

It has declined to give full-year earnings guidance, citing continuing economic uncertainty and ongoing risk of COVID-19 restrictions.

Investors must have been expecting more, sending Baby Bunting shares as low as $5.05 in early trade after opening at $5.65.

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