“Consumer staples, which are more widely available across general retail, saw a decline of 4.7 per cent. Play time items [including play gear] declined 3.6 per cent in the half, reflecting price deflation and reduced demand after the pandemic,” Spencer said.

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Rising business costs eroded Baby Bunting’s bottom line for the half, with store expenses jumping from $47.7 million the same time last year to $53.8 million this year, while warehousing expenses accelerated from $4.4 million to $5.9 million.

Spencer told analysts that despite the challenging conditions, the group’s core strategy had not changed and the business was continuing to roll out new stores this year.

The company is working towards launching a retail marketplace in the last quarter of this year, which it says represents a “significant revenue opportunity”.

Citi analysts said there are short-term uncertainties on the horizon for the brand as economic conditions continue to weaken, but there is reason to be positive about the future opportunities for the company.

“In our view, Baby Bunting still has a number of long-duration growth strategies, which appear intact, and the [earnings] multiple is substantially lower than it has been previously,” they said in a report to clients.

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