Australia's biggest specialist baby goods retailer in 2025 refurbished nine of its large-format stores as "stores of the future," with demonstration zones for products and a warmer, more intuitive design for customers.
They also feature spaces like a whimsical canopy made up of baby bottles designed to spark a sense of wonder, and calming spaces meant to evoke a friend's kitchen.
The refurbishments cost an average of $1.5 million apiece and involved closing each for 10 to 12 weeks - but they have bumped up each store's sales by an average of 25 per cent, Baby Bunting revealed on Tuesday.
"These stores also have a halo effect on our brand perception, more importantly, across our Australian retail network," chief executive Mark Teperson told analysts in an earnings call.
It plans to convert another six stores into "stores of the future" during the second half on this financial year and expects the refurbishments will pay for themselves in two to three years with a 15-25 per cent uplift in sales.
In the first half of 2025/26, Baby Bunting's total sales at its 74 Australian and five New Zealand locations rose 6.7 per cent to $271.4 million from the previous corresponding period.
Same-store sales rose 4.7 per cent in the six months to December 29, beating guidance of two to three per cent comparable sales growth.
Net profit rose 4.1 per cent to $5 million in the half.
That momentum has continued into the second half, with same-store sales up 6.7 per cent in the seven weeks to Sunday.
Baby Bunting opened three small-format stores in the last few months of 2025 at shopping malls on the Gold Coast and in suburbs of Melbourne and Adelaide, but they had not done quite so well.
One of those Baby Bunting Junior stores was performing to target while two were slightly behind, Mr Teperson said.
"We are large-format destination retailers," he added.
"As we move into a shopping centre environment, we've recognised that there is some finesse in the execution that we need to bring in how we convert more passing traffic into in-store shoppers."
The stores are also showing signs of improvement, but tentative plans to open two or three more small-format stores are on hold for the rest of the second half.
Baby Bunting plans to open two new large-format stores in the second half, on the NSW Central Coast and in suburban Melbourne.
RBC Capital Markets analyst Jackie Moody said that while Baby Bunting's stores of the future program had delivered a strong lift in sales, its first-half profit had narrowly missed expectations.
The retailer's forecasts for capital expenditure over 2025/26 had increased by 29 per cent to $41 million to $43 million, Ms Moody noted.
Baby Bunting said it wouldn't pay a dividend while it focuses on growth.
In afternoon trading, Baby Bunting shares were up 4.6 per cent to $2.30.
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