The Baby Bunting (ASX: BBN) share price is up more than 10% after the retailer gave the market an update.
What is Baby Bunting?
Baby Bunting is a retailer that specialises in baby goods with over 6,000 lines such as prams, cots, car safety equipment, toys, feeding and other accessories. Starting in Melbourne in 1979, the company now has over 50 stores in Australia with plans to grow the store count beyond 80 over the next few years. It currently employs over 700 people.
Baby Bunting’s exciting update
The retailer announced its trading performance for the second half from 30 December 2019 to 17 May 2020.
Total sales growth has been 13.2% with comparable store sales growth of 8.1%. Online sales are 17.3% of total sales, representing growth of around 66% compared to the prior corresponding period.
Baby Bunting also released its numbers on a financial year to date (YTD) basis. Total sales growth is 10.3%, comparable store sales growth is 3.4% and online sales have been 14.3% of total sales which represents growth of around 34%.
The company boasted that its sales performance reflects the less discretionary nature of the baby category and many new customers have shopped with Baby Bunting during these difficult times.
Online sales were 12.4% of sales before 23 March 2020 to 22.4% of sales through the following two month period to 17 May 2020 according to Baby Bunting. This was despite all Baby Bunting stores remaining open during the current period.
Baby Bunting CEO and Managing Director Matt Spencer said: “Initially during the period of public health restrictions, there was strong demand for lower margin consumables products, including nappies and baby wipes. As the period has progressed, we have seen increases in purchases of products for the nursery, such as cots and furniture, toys and playgear and bedding. We did see lower transactions in travel-related products such as prams and car seats. However, as restrictions have eased, sales of these products have begun to recover.”
Is the Baby Bunting share price a buy?
The company itself acknowledged it’s difficult to anticipate how things will play out, and Baby Bunting is facing increased costs. The share price has already recovered a lot, so investors may have missed out on most of the gains. I would much rather buy the technology shares below.
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Disclosure: at the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.