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Baby Bunting's (ASX: BBN) is riding its own baby boom that has helped earnings surge 54.7 per cent to $7.48 million in the first half of FY21, driven by significant growth in online sales.
The result was built on a 16.6 per cent increase in group sales to $217.3 million, with the company's CEO Matt Spencer highlighting the essential nature of maternity and baby goods for parents and parents-to-be, meaning spending is less discretionary.
Baby Bunting's latest result for the six months to 31 December have put a spotlight on its rising level of digital engagement, as total online sales almost doubled to account for close to a fifth of group turnover.
The 95.9 per cent increase in online sales was buoyed by a 218 per cent surge in click-and-collect sales, supporting the company's plans to expand its bricks-and-mortar footprint.
Comparable store sales were strong as well, with Spencer commending the team for servicing new and expectant parents "tremendously well" in what can only be described as an unusual and difficult time.
After opening three new stores in Australia during the half year, Spencer indicates there are more planned in the period ahead.
The success of online sales to Kiwi customers has also led Baby Bunting to explore a diversified push into the New Zealand market where it has set a target to open 10 stores over time.
The company started shipping online orders across the Tasman in July, and has identified the New Zealand market as worth NZ$450 million (A$419 million).
"Following a successful launch of online sales into New Zealand, I'm very excited to announce our plans to establish a multi-channel retail proposition in New Zealand with our first store anticipated to be opened in FY22," says CEO Matt Spencer.
"All up, we have seen some great results and it continues to be a very exciting time for Baby Bunting."
Sales growth has continued into the current half, with Baby Bunting reporting solid growth in online and in-store trading.
Comparable store sales are up 18.5 per cent in the first six weeks of the half and by 15.7 per cent on a year-to-date basis.
"Maternity and baby goods are essential products for parents and parents-to-be and are less discretionary in nature," says Spencer.
"Our strong comparable store and total sales growth performance demonstrates that we continue to deliver on our strategy of growing market share.
"The Baby Bunting team has done tremendously well servicing new and expectant parents in what can only be described as an unusual and difficult time."
Investors have been rewarded with a 41 per cent increase in the interim dividend to 5.8c per share, up from 4.1c a year ago.
BBN shares were down 6.6 per cent at $5.25 each at the close of trading today.
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