Specialist child items retailer Child Bunting has blamed softer than anticipated gross sales in the important thing December buying and selling interval for a 59 per cent stoop in half-year earnings.
In an announcement to the ASX on Monday the corporate booked a 6.6 per cent progress in gross sales for the half to $254.9 million, however web revenue after tax got here in at $5.1 million, in contrast with $12.5 million final yr.
Chief government Matt Spencer had flagged again in October that Child Bunting’s gross margin had declined within the first quarter of 2023 for a variety of causes, together with shifting extra of its merchandise to its “on daily basis low value” coverage, in addition to greater enter prices like freight charges rising.
The group’s loyalty program had additionally affected margins within the first quarter as clients redeemed rewards at a better price than the corporate had anticipated. The enterprise has since tweaked the phrases of its loyalty program.
On Monday Spencer instructed buyers that reductions in worldwide delivery charges would assist margins within the second half.
Nevertheless, he famous that the corporate’s general half-year end result was affected by “the mixture of decrease gross revenue margin for the half and softer than anticipated gross sales in December”.
The corporate mentioned in its announcement lodged with the ASX that the group’s gross sales progress within the second quarter was “beneath Child Bunting’s expectations in the direction of the top of the quarter”.
Spencer mentioned must-have child items had continued to carry out nicely over the half.
“Our core nursery classes, that are much less discretionary resembling automobile security, prams and feeding, continued to carry out nicely by means of the half and are an essential a part of Child Bunting’s future progress,” he mentioned.