Baby Bunting's shares have jumped to their highest level in more than a year, after the baby goods company reported a more optimistic outlook following the collapse of its biggest competitors.
The group reported a 29 per cent fall in full-year profit to $8.69 million on Friday - the result of the collapse of four major competitors, including Toys R Us, triggering heavy discounting across the baby goods sector.
Baby Bunting's revenue rose 9 per cent to $303 million in the year to June 30, however and managing director Matt Spencer said the closures of the competitors had strengthened the company and consolidated its position as a market leader.
"In unprecedented times, Baby Bunting's top four specialty baby goods competitors all entered external administration, resulting in significant price deflation as a result of distressed retailing," he said in a statement on Friday.
"Despite this, Baby Bunting was still able to grow sales and transaction volumes within the difficult trading environment."
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The company forecast growth in 2018/19 after a strong start, with comparable store sales growth at 9.8 per cent in the first six weeks of the new financial year.
Baby Bunting expects gross profit margin to recover to be more than 34 per cent and earnings to be in the range of $24.0 million to $27.0 million, representing growth of about 30 to 45 per cent.
The company is also opening six new stores in 2018/19.
At 1106 AEST, Baby Bunting shares were up 49 cents, or 28.2 per cent to $2.223, their highest since March 2017.
BABY BUNTING PROFIT DOWN, BUT OPTIMISTIC:
* 2017/18 net profit after tax down 29pct to $8.69 million
* Revenue up 9pct to $303 million
* Final dividend of 2.5 per cent, fully franked
