Baby Bunting warned that its net profit is expected to be between $2 - $4 million this financial year - approximately 69% less than last financial year.
👉 Background: Baby Bunting aka the playground for anxious soon-to-be-parents started way back in 1979, but listed on the ASX in 2015. Some call it the ‘Disney World for baby products’ - selling everything from prams to cots to car seats that cost a pretty penny.
👉 What happened: Late last week, Baby Bunting warned that its net profit is expected to be between $2 - $4 million this financial year - approximately 69% less than last financial year. This saw Baby Buntings share price drop by over 22%.
👉 What else: And Baby Bunting is blaming drop in profit on the cost of living crisis - which they reckon young parents are more sensitive to.
💡Not all economic downturns affects all people equally. While a slower economy and increase in interest rates has an impact on everyone, it hurts certain demographics more than others.
💡In fact, Australians in their 30s and early 40s are the most indebted borrowers in the nation, with debt levels up to triple the size of their incomes. That's about six times as large as people aged over 65.
💡This over-leveraged demographic is Baby Bunting’s core customer. So with increased cost of living AND increased mortgage repayments hitting its customers, it’s no surprise that Baby Bunting is feeling the pain.
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