Key points
- Redesigning store experience for customers of today and tomorrow
- Launching small format stores to target high-traffic areas
- Unlocking new revenue stream through retail media business
Full summary
Baby Bunting Group Ltd is unveiling its 'Store of the Future' vision, aimed at delivering an enhanced customer experience and driving growth across its store network. The company's qualitative research has identified the need to update its store environments, which were previously described as 'uninviting' and lacking in 'fun'. The new store format will position each location as a 'stage for our brand partners to showcase their innovation and new products, a distribution centre for our products, and an experience centre for our customers'. The design approach, developed in partnership with leading brand and store design agency The General Store, focuses on activity-led merchandising and emotionally resonant design. The company is targeting a rollout of 8-12 refurbished 'Store of the Future' locations in FY26, with each refurbishment expected to drive over 10% comparable store sales growth. To further expand its reach, Baby Bunting is also piloting a small format store concept in FY26, targeting higher-traffic areas and aiming to grow customer lifetime value. Additionally, the company is building a retail media business to unlock a new revenue stream by monetizing its existing in-store and digital assets, with a FY25 target of a neutral contribution and FY26 target of $2-3 million in incremental gross margin. Overall, these strategic initiatives are part of Baby Bunting's plan to re-establish the business as a +10% EBITDA margin company.
Guidance
FY25 pro forma NPAT guidance of $10 million to $12.5 million, assuming comparable store sales growth of 2% to 3%, gross margin of 40%, and capital expenditure of $11 million to $12 million.
Outlook
Baby Bunting is focused on improving gross margin, driving operating leverage, and expanding its store network, including the rollout of 8-12 refurbished 'Store of the Future' locations and up to 40 small format stores in the longer term.