Quite the move with Baby Bunting shares today after their results were released. up 28%!!

I'm not intimately familiar with the business, but this seems to be all about an improvement in same store sales combined with a material lift in gross margins. In a low margin business like BBN, that can have a big impact on profitability. A 340bp improvement in gross margins saw the EBITDA margin rise from 3.2% last year to 5.4% this year, which pushed EBITDA up 77% even though revenue was only 4.7% higher.

Still, in a challenging retail environment, that margin tailwind can just as easily turn into a headwind. BBN has managed steady and consistent revenue growth since listing, apart from a small dip in FY24, but net profit has been far more volatile and is now only back to where it was in FY17.

Retail is a tough game.