The Baby Bunting Group Ltd (ASX: BBN) share price rose today after reporting its FY26 result.
It was up as much as 23% in early trading in response to its report.
Baby Bunting is the largest retailer of baby and toddler products in Australia, selling car seats, prams, clothes, toys, furniture and so on.
FY26 result
Let’s look at the highlights for the 12 months to 28 June 2026:
- Sales grew 6.5% to $556 million
- Gross profit margin improved 100 basis points (1.00%) to 41.2%
- Cost of doing business (CODB) improved by 30 basis points (0.30%) to 34.5%
- Underlying net profit grew 33.9% to $16.1 million
- Statutory net profit rose 17.5% to $11.2 million
What drove the numbers
Management explained that part of the growth was driven by comparable store sales growth of 3.5% and the opening four large format stores during the year and three Baby Bunting Junior small-format stores.
The business also reported that online sales grew by 16.7% and represented 25.3% of total sales, up from 23.1%.
Baby Bunting noted that during the financial year, it signed an exclusive three-year partnership with Stokke, one of the world’s most recognised premium children’s brands, deepening its exclusive range that helps differentiate Baby Bunting from other retailers.
The board of directors decided not to pay a final dividend for FY26 to support ongoing funding of its growth strategy.
Outlook for the Baby Bunting share price
The company noted how many stores it expects to open in FY27.
It expects to open three new large format stores in FY27, with plans to complete 10 to 12 refurbishments in FY27
In the first six weeks of trading of FY27 to 9 August 2026, it has seen 6.1% total sales growth and 4.3% comparable store sales growth, with 3.9% comparable sales growth in Australia and 15% comparable sales growth in New Zealand.
Comparable sales growth is expected to moderate in the next several weeks, reflecting the ramp-up of the first-half refurbishment program.
FY27 underlying net profit is expected to be in the range of between $19 million to $21 million, assuming total sales of between $585 million to $600 million and a gross profit margin of 42%.
In other words, net profit could grow by at least 18%, driven by higher sales and a stronger gross profit margin.
Baby Bunting shares could be undervalued if it continues delivering this sort of earnings growth, though it’s not one of the first ASX growth shares I’d buy. I’d be happy if I were an existing shareholder, though.
