Baby Bunting (ASX:BBN) share price: all-time highs and potential teething issues

The Baby Bunting Group Ltd (ASX: BBN) share price hit all-time highs today, but the potential impacts of COVID-19 might still be lingering.

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Shares in Baby Bunting Group Ltd (ASX: BBN) have continued their trend upwards today to set yet another all-time high. Australia’s largest specialty retailer of baby goods has enjoyed a 165% rise in its share price over the last year.

At the end of Friday’s session, the Baby Bunting share price was $6.58, up 3.8%.

Results recap

The last lot of metrics to come out of the company were back in February. With the Baby Bunting share price surging since then, it might be worth taking a look again.

For the first half of FY21, the retailer achieved sales growth of 16.6% compared to the prior corresponding period (pcp) to $217.3 million. While earnings before interest, tax, depreciation, and amortisation (EBITDA) grew to $18.5 million – an increase of 29.7%.

Operating in what Baby Bunting describes as “a less discretionary category”, the company grew through a challenging period. During the first half, the company added 3 new stores and didn’t receive any JobKeeper payments.

Most notably, after a thorough assessment, Baby Bunting made the decision to expand to New Zealand. It now expects to open its first store in FY22, with plans of over 10 stores across the region.

It’s all good news, which explains the Baby Bunting share price rally. However, there is one potential ‘teething issue’ that could slow momentum.

Will fewer ‘customers’ affect Baby Bunting share price?

Australia’s birth rate has been in decline for several years. The natural increase in population was 3.8% lower than the previous year for the 12 months to September 2020.

Typically, Australia relies on immigration for its population growth. But with international borders remaining closed due to COVID-19, immigration inflows are non-existent.

Actual birth statistics are always lagging due to the arduous collection of data. As a result, we likely won’t know the full extent of birth rate impacts in Australia until the end of the year. Though, the longer border restrictions are in place, the bigger the birth deficit in Australia.

For now, the Baby Bunting share price and its shareholders are unfazed.

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Baby Bunting. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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