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Baby Bunting reaffirms FY17 forecast

AAP logoAAP 20/11/2016

Australia's largest speciality infant goods retailer Baby Bunting has lifted store sales more than usual, is on track to open four new stores and expects to realise its full-year underlying earnings target.

Chief executive Matt Spencer has told shareholders at the group's annual general meeting on Monday that earnings before interest, taxes, depreciation and amortisation is still expected to be in the range of $21.5 million to $24.5 million for 2016/17.

Mr Spencer said sales in the year to November 13 had risen 20.3 per cent compared to the same period a year ago and that comparable store sales, which strips out new store openings, had risen 10 per cent.

"This is above our historical comparable store sales growth performance," he said.

"We do expect comparable store sales growth to moderate as the year progresses to be more in line with our historical average (of mid-single digit growth)."

This was because the group was cycling off exceptionally strong comparable sales recorded in the second half of the 2016, he said.

Shares in Baby Bunting have rallied on the back of the trading update and were up nine cents, or 3.27 per cent, at $2.84 at 1120 AEDT.

Baby Bunting continues to grow its online sales which now account for 5.7 per cent of its sales in the year to date, up from 4.2 per cent in 2015/16.

Mr Spencer said the group would continue to expand its private label products but warned that Baby Bunting was up against reduced profits from a small number of key lines that had been discounted.

The retailer plans to open four new stores before Christmas - at Preston in Victoria, Camperdown in Sydney, Baldivis in WA and Belroseo on Sydney's northern beaches.

It currently has 39 stores and plans to have an 80-store network longer term.

Baby Bunting's net profit rose 38 per cent to $8.3 million in 2015/16 thanks partly to strong sales of prams, car seats and nappies, and to the collapse of rival My Baby Wharehouse.

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