Baby Bunting's share price has taken a hit despite a 28 per cent bounce in first-half profit to $5.2 million, with the infant goods retailer falling short of lofty market expectations.
Revenue was up 17.2 per cent to $177.68 million after it opened an extra five stores during the six months to December 30, while its online sales grew from 8.4 per cent of sales in the prior corresponding period to 11.5 per cent.
But the company's share price had slumped by 3.43 per cent to $2.25 at 1300 AEDT on Friday, with the headline growth result coming in below analysts' expectations.
Rising first-half costs from award wage increases weighed on investors' minds as well as the cost of store pre-openings as the company left its full year pre-tax earnings guidance unchanged at between $25 and $27 million despite the profit lift.
Chief executive Matt Spencer said online sales had increased by more than 60 per cent in the half, adding that the company was preparing to launch a new digital platform next month.
The retailer said its click-and-collect sales grew substantially, with customers opting to pick up their goods from Baby Bunting stores in 47 per cent of online sales instances where there was a shop nearby.
"This demonstrates the role that stores and online can play in driving complementary sales growth," the company said.
Baby Bunting's total number of physical stores stands at 52 after it added another two in Sydney and opened new shops in Melbourne, Hobart and Toowoomba at the same time several of its competitors were shutting down.
Rival Baby Bounce collapsed last year, shutting ten stores in NSW and Queensland in June 2018 while Baby Savings closed four of its stores during the same month.
"We started the year in unsettled trading times with major competitor disruption and Toys R Us / Babies R Us in administration," Mr Spencer said, noting the winding up of the toy giant which resulted in 45 stores closing across Australia in August.
Baby Bunting said it expects to open another new store in Wollongong in NSW before the end of the 2019 financial year.
Baby Bunting raised its interim dividend 0.8 cents to a fully franked 3.3 cents.
BABY BUNTING HALF-YEAR PROFIT
* Net profit up 27.8pc to $5.2 million
* Revenue up 17.2pc to $177.68 million
* Fully franked dividend of 3.3 cents per share
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