Baby Bunting continued its refurbishment blitz in the year to June 30, upgrading 12 more of its 77 showrooms into "stores of the future" designed to be warmer and more intuitive for parents.
The glittering emporiums have dragged the retailer's previously flagging sales back from the brink, now sitting at $556 million after a second straight record-breaking year, its bosses proclaimed at an earnings briefing on Friday.
"It was the year our strategy moved from proof of concept to scale," Baby Bunting chief executive Mark Teperson said.
"We are rebuilding earnings power, not just recovering it."
But there is evidence the spending barrage and tighter wallets among consumers have taken a toll.
Baby Bunting's net profit undershot its own forecasts despite jumping 17.5 per cent to $11.2 million in the year to June 30, having previously been tipped to land between $12.5 to $14.5 million.
It also slid below its own projections for the real growth of its store sales, which it predicted halfway through the year would be five to seven per cent but ended up at just 3.5 per cent.
"As the macro-economic environment tightened, we did see transaction values moderate slightly through the second half," Baby Bunting chief financial officer Darin Hoekman said.
The company cited high fuel prices and interest rate hikes for slowdowns across its range of high-end strollers and pricey car seats.
"Delays in new car seat range, our biggest category, and a greater number of refurbishment-related store closure days also had an impact on the growth rate," Mr Hoekman said.
Refreshing 12 of its stores, opening six more, closing one and relocating another over the year wasn't cheap, with the glamorous new showrooms costing $1.5 million apiece on average.
Baby Bunting's capital expenditure for the year swelled to $44.5 million, causing its free cash flow to nosedive from $10.1 million to negative $8.8 million.
But the company isn't about to spit the dummy as the new stores have delivered 18 per cent sales growth as was hoped.
The rebuilds are still on target to pay for themselves within three years.
And they've only taken baby steps so far, with up to 12 more locations earmarked for renovation in the coming financial year, 60 more in the long term and possibly 80 brand new showrooms joining its armada in future.
The cash flow figures did not spook investors, who leapt on Baby Bunting's stock to send it 21.6 per cent higher to $1.47 in early Friday trading, its highest price since late June.
The company's shareholders did not receive a dividend.
16°C