Baby Bunting Lifts Australasian Sales as Store Upgrades Drive 20% Growth

Baby Bunting lifted sales across Australia and New Zealand between August 15 and October 4, driven by a 20 per cent cumulative revenue rise across its newly refurbished locations.

Australian store sales rose 2 per cent during the period, while New Zealand operations jumped 8.7 per cent following capital investments in redesigned shop floors.

Store of the Future rollout gathers pace

The specialty nursery retailer poured $44.5 million into its Store of the Future program during fiscal 2026. Management plans to refurbish or open 120 locations across both markets before the overhaul finishes.

Seven stores entered fiscal 2027 closed for renovations. The redesign swaps traditional category aisles for activity-based displays organised around nursery setup, feeding, travel and play routines.

“The new format moves our stores from a category-led layout to an activity-led layout, designed around how parents actually shop, and the results speak for themselves,” Chief Executive Officer Mark Teperson said.

Divergence between new and old formats

Older stores without the redesign lagged internal sales targets as broader discretionary retail spending softened. The upgraded footprint carried total revenue higher instead.

That divide mirrors challenges across specialty retail in Australasia. Big-box specialty chains face higher wage rates, utility bills and cautious consumer budgets, forcing operators to extract higher sales density from existing square metres rather than purely opening new doors.

Landlords face increased scrutiny over tenant allowances and lease terms. Retailers willing to invest capital into physical experiential formats hold stronger use in lease renegotiations across key suburban homemaker centres.

Margin targets and consumer headwinds

The capital expenditure follows a fiscal 2026 recovery after inventory corrections and discount pressures weighed on earnings across the baby goods sector. The company disclosed the early fiscal 2027 figures in an ASX filing ahead of its annual general meeting.

Teperson told shareholders the executive team is tracking interest rates and cost-of-living pressure on young households ahead of the peak year-end holiday shopping cycle.

Baby Bunting aims to lift its earnings before interest, tax, depreciation and amortisation margin back above 10 per cent as the network refurbishment scales toward its 120-store target.