Summary
The fund managers believe that Baby Bunting Group Ltd is well-positioned for growth due to its strong market presence and expanding product range. In their opinion, the company's focus on customer experience and innovation will enhance its competitive advantage. They highlight consistent revenue growth and improved profitability as key indicators of the company's solid performance. Furthermore, the fund managers see potential in Baby Bunting's strategic initiatives aimed at increasing online sales, which could significantly boost overall sales figures. They also note the importance of cost management in maintaining margins and enhancing shareholder value. Overall, the fund managers express a positive outlook on Baby Bunting's future, suggesting that it remains a compelling investment opportunity in the retail sector.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Source: Trading View
Commentary From The Managers
1851 Capital
19 Sept 2025
$3.13
Summary
- 1851 Capital continues to hold a positive outlook on Baby Bunting Group Ltd.
- Mark Teperson, the new CEO, has been in the role for two years and is implementing effective strategies.
- The company has refurbished three stores, resulting in a revenue increase of over 25% in those locations.
- Plans are in place to refurbish an additional 10 to 12 stores in the current financial year.
- Baby Bunting is rolling out smaller format stores and expanding its range of exclusive and private label products.
- The share price has already increased by 50% following these positive developments.
- 1851 Capital believes Baby Bunting has the potential for further growth.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
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Commentary From The Managers
1851 Capital
19 Sept 2025
$3.13
- 1851 Capital continues to hold a positive outlook on Baby Bunting Group Ltd.
- Mark Teperson, the new CEO, has been in the role for two years and is implementing effective strategies.
- The company has refurbished three stores, resulting in a revenue increase of over 25% in those locations.
- Plans are in place to refurbish an additional 10 to 12 stores in the current financial year.
- Baby Bunting is rolling out smaller format stores and expanding its range of exclusive and private label products.
- The share price has already increased by 50% following these positive developments.
- 1851 Capital believes Baby Bunting has the potential for further growth.
Summary
Firetrail Investments
31 Aug 2025
$2.83
- Firetrail Investments observes that Baby Bunting Group Ltd has sharply outperformed following FY25 results.
- Management reported that refurbished stores are performing +28% compared to the prior year.
- There has been a 3.4% expansion in gross margins.
- There is potential for continued gross-margin repair and operating leverage if category demand remains resilient.
- Baby Bunting is positioned to achieve >30% returns on store refurbishments over the next five years.
- This strategy is expected to drive strong profit growth and ongoing rerating.
Summary
SG Hiscock & Company
31 Aug 2025
$2.83
- Baby Bunting (BBN) is the largest participant in the retail sector for baby products.
- SG Hiscock & Company has long anticipated BBN's potential to become a dominant franchise in this segment.
- Execution has previously fallen short of this potential, leading SG Hiscock & Company to monitor from the sidelines.
- New CEO Mark Teperson, appointed two years ago, has a clear plan to enhance the parent offering and customer value proposition.
- SG Hiscock & Company supports the CEO’s vision and early progress observed since their investment earlier this year.
- The August update confirmed improved performance, driven by increased sales and profit growth.
- BBN is advancing with a 'store of the future' revamp, aiming for a strong sales cadence and improved profit margins.
- This strategic direction has been positively received by investors.
Summary
Oracle Advisory Group
30 June 2025
$1.84
- Oracle Advisory Group updates their investment thesis on Baby Bunting Group Ltd.
- Baby Bunting has seen a 1.2% increase under new CEO leadership.
- Significant strides include store refurbishments and a rollout of smaller-format stores in high-traffic areas.
- Efforts are underway to restore gross profit margins to >40%.
- These initiatives position the company for a positive outlook following recent challenges.
Summary
HMC Capital
30 June 2025
$1.84
- Baby Bunting ended the quarter up 4.5%.
- The company’s turnaround remains on track, reaffirming full year guidance in early May.
- Gross margin has improved, meeting the FY25 target of 40% (YTD to 27 April 2025).
- Continues to target a return to +10% EBITDA margin.
- Following the successful launch of the new Store of the Future in April, Baby Bunting re-opened two additional refurbished stores in Victoria and South Australia in June.
- Plans to refurbish a further 8 – 12 stores in FY26.
- Each refurbished store is targeting >10% comp store sales growth.
- Sales revenue growth is expected through FY26, alongside network expansion with the addition of 5 – 8 new large format stores and 3 pilot small format stores.
- Sales growth should also be supported by expected interest rate cuts and broader enhancements to Baby Bunting’s ranging and marketing.
Summary
HMC Capital
31 May 2025
$1.70
Summary
Elston Asset Management
31 Mar 2024
$2.04
- Baby Bunting (BBN) is the only specialty baby goods retailer with a national footprint in Australia, founded in 1979.
- BBN offers a wide range of products for children from newborn to three years, including prams, car seats, furniture, and more.
- As of December 2023, BBN operates 74 stores (70 in Australia, 4 in New Zealand) with aspirations to reach 120 stores.
- The domestic baby goods market is valued at over $5.0bn annually, with BBN targeting a $3.5bn addressable market, holding about 15% market share.
- Elston continues to hold BBN despite challenges, including revenue growth and gross margin weakness due to supply chain issues and changing consumer behaviors.
- BBN's share price has declined to $2.10 from an initial $3.20 since being added to the portfolio in June 2020.
- Management has opened 10 new stores in Australia and 4 in New Zealand since July 2022, although these stores are yet to reach revenue maturity.
- The transition to a new CEO is viewed positively, with a focus on modernizing customer engagement and expanding in the NZ market.
- Competitive advantages include a wider product range, exclusive offerings, and knowledgeable staff, with limited competition in the domestic market.
- Elston adopts conservative assumptions for BBN, projecting mid-single digit sales growth and a return to historic EBIT margins over the next 5 years.
- Risks include potential failure in executing strategic initiatives and meeting expansion expectations, particularly in New Zealand.
- Despite recent challenges, Elston believes BBN can drive revenue and profit growth over the long term, considering its strong brand and market position.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Frequently Asked Questions
Who has invested in Baby Bunting Group Ltd (ASX:BBN)?
Fund managers including Elston Asset Management, HMC Capital, Oracle Advisory Group, 1851 Capital, Firetrail Investments and SG Hiscock & Company have invested in Baby Bunting Group Ltd (ASX:BBN).
Why have investment managers invested in Baby Bunting Group Ltd (ASX:BBN)?
Fund managers invest in Baby Bunting Group Ltd due to its unique position as the only specialty baby goods retailer with a national presence in Australia and its recent strategic initiatives aimed at revitalizing growth. The company has a deep product range catering to parents of newborns to three-year-olds, capturing approximately 15% of a $3.5 billion addressable market. Despite recent challenges, including supply chain issues and changing consumer behavior, Baby Bunting is focusing on store refurbishments, expanding its network, and enhancing customer engagement under new leadership. The introduction of a 'Store of the Future' concept and plans for smaller, conveniently located stores aim to improve customer experience and drive sales growth. Fund managers see potential for above-inflation growth in the baby goods market and believe that Baby Bunting's strategic direction could lead to significant upside over the next five years.
What happened to Baby Bunting Group Ltd (ASX:BBN)?
In September 2025, fund manager 1851 Capital expressed strong bullish sentiment on Baby Bunting Group Ltd, highlighting the positive impact of new CEO Mark Teperson's leadership over the past two years. With the share price around $3.13, they noted impressive results from refurbished stores, which saw revenue increases of over 25%. Firetrail Investments, in their August 2025 report, echoed this optimism, citing a 28% performance boost from refurbished stores and a 3.4% gross margin expansion, predicting continued profit growth. Similarly, SG Hiscock & Company recognized Baby Bunting's potential as a dominant player in the baby goods market, praising Teperson's strategic vision and the company's evolving store formats, which are well-received by investors.