Retail Expansion Drives Record Earnings for Baby Bunting
•February 17, 2026
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Why It Matters
The results demonstrate how strategic retail expansion combined with e‑commerce growth can boost profitability in a mature Australian market, signaling confidence in consumer spending on baby goods.
Key Takeaways
- •Half‑year sales rose 4.9% to $271.4 million.
- •Online sales now 24.8% of total, up 18%.
- •$25.9 million invested in new and refurbished stores.
- •Gross profit increased 10% to $111.4 million.
- •FY profit outlook set at $17.5‑$19 million.
Pulse Analysis
Baby Bunting’s aggressive rollout of both large‑format and boutique stores underscores a broader trend of retailers leveraging physical footprints to capture higher‑margin sales. By allocating $25.9 million to two new flagship locations, three smaller concepts, and six technologically upgraded outlets, the chain not only broadened its geographic reach but also refreshed the in‑store experience, which historically drives repeat purchases in the baby‑care segment. This capital‑intensive approach paid off, contributing to a near‑5% sales lift and reinforcing the retailer’s position as Australia’s leading specialty baby goods provider.
The surge in online sales to nearly a quarter of total revenue reflects shifting consumer habits accelerated by pandemic‑era digital adoption. Baby Bunting’s investment in its e‑commerce platform—enhanced product listings, streamlined checkout, and integrated click‑and‑collect services—has translated into an 18% increase in digital revenue. This hybrid model allows the company to capture high‑value customers who research online but prefer the tactile assurance of in‑store purchases, creating a synergistic sales funnel that fuels overall growth.
While expansion boosted top‑line performance, operating expenses rose to $96.8 million, prompting the retailer to pursue cost‑reduction initiatives. Targeting refurbishment spend reductions to $1.5 million per store and negotiating better terms with builders aim to improve margin sustainability. The refined net‑profit guidance of $17.5‑$19 million signals confidence that these efficiency measures, combined with continued store rollouts slated for Q3, will preserve earnings momentum. For investors and industry observers, Baby Bunting’s balanced focus on physical growth, digital acceleration, and cost discipline offers a blueprint for scaling profitability in a competitive retail landscape.
Retail expansion drives record earnings for Baby Bunting
Australia’s largest specialty baby goods retailer, Baby Bunting, has reached record heights in the first half of the 2026 fiscal year.
Company-wide sales for the period of $271.4 million represented a 4.9 per cent increase compared with the prior comparable period. Online sales now represent 24.8 per cent of the company’s sales, an 18 per cent increase. Baby Bunting is still led by its 79-strong network of retail stores.
Baby Bunting carried out $25.9 million in investments across the half-year, adding two large-format stores, three small-format stores, and completing six ‘store of the future’ refurbishments. The company said it is opening two more large-format stores in Q3.
These additions led to the cost of doing business rising to $96.8 million. However, Baby Bunting still achieved $111.4 million in gross profit, a 10 per cent increase on the previous year.
Store refurbishments incurred an average cost of $1.7 million; the company is targeting cost reductions to $1.5 million through better-value arrangements with builders and suppliers. By 2027, Baby Bunting said it aims to target cost reductions of between $1 million and $1.4 million for metro stores and between $800,000 and $1 million for regional stores.
The company has now refined its guidance for net profit after tax for the remainder of the financial year, expecting it to fall between $17.5 million and $19 million.
The post Retail expansion drives record earnings for Baby Bunting appeared first on Inside Retail Australia.
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