- Nursery and baby retailer, Baby Bunting (BBN), has issued a cautious update as it braces for the impact of COVID-19
- The company has cut capital expenditure by roughly $7 million, most of which was pocketed for the company’s rebranding
- Baby Bunting has also suspended the launch of its new website
- While it has enjoyed steady sales growth so far this year, the company is expecting to feel the pinch brought on by COVID-19
- Despite the update, Baby Bunting is up 11.6 per cent on the ASX, with shares trading for $1.79 apiece
Nursery and baby retailer, Baby Bunting (BBN), has issued a cautious update as it braces for the impact of COVID-19.
Established in 1979, the company has 56 stores across Australia and employs more than 700 people.
Yesterday it issued a cautious update regarding COVID-19 and its 2020 outlook. While the company’s operations have been minimally impacted so far, Baby Bunting acknowledged that it would likely not stay that way.
During the second half of this financial year, total sales have increased by 12.4 per cent, while comparable-store sales have grown by 6.2 per cent.
Growth in online sales over the same period also increased by 28.6 per cent.
Baby Bunting also pointed out that its supplier factories and international logistics are making a move back to pre-virus activities, and that there has been minimal impact on the company’s supply chain to date.
However, given the sustained uncertainty in markets around the world, the company is making adjustments to its capital expenditure in order to preserve its funds.
Baby Bunting has cut capital expenditure by roughly $7 million, most of which was pocketed for the company’s rebranding.
The company also added that the launch of its new website will not occur within this calendar year.
Matt Spencer, Managing Director and CEO of Baby Bunting, said that a number of health and safety measures have been implemented.
“We have changed work practices at our Distribution Centre and Store Support Office, including segregating teams and working remotely, to ensure that our stores and online operations continue to function as effectively as possible,” he added.
While the company’s performance to date has been in line with expectations, the uncertainty surrounding COVID-19 renders it “no longer appropriate” to continue to provide earnings guidance.
As such, Baby Bunting has retracted its previously announced financial guidance for this year, and will provide further updates in due course.
Despite the update, Baby Bunting is up 11.6 per cent on the ASX, with shares trading for $1.79 apiece at 11:43 am AEDT.