The Baby Bunting Group Ltd (ASX: BBN) share price is on the move this morning.
At the time of writing, the baby products retailer's shares are down 1.5% to $5.45.
Why is the Baby Bunting share price falling?
Investors have been selling down the Baby Bunting share price today following the release of a trading update at its annual general meeting (AGM).
According to the release, Baby Bunting's comparable store sales are down 1.3% year to date to 3 October. However, if you exclude its ACT and NSW stores, comparable store sales would have been up 4.7%.
And while it hasn't been enough to stop the Baby Bunting share price from falling, this update is actually a big improvement on its performance earlier in FY 2022.
Baby Bunting's CEO, Matt Spencer, commented: "When we last updated the market on 13 August, comparable store sales were negative 6.4% for the first 7 weeks of the year. Since then, we have seen a positive trend in comparable store sales growth, despite the ongoing lockdowns experienced across Victoria, NSW and the ACT."
"From week 7 to week 14, we have seen positive comparable sales growth of 3.2% which takes us to a negative 1.3% comparable store sales performance year-to-date. If you exclude our NSW and ACT stores, since week 7 we have experienced comparable store sales growth of 10.0% with a year-to date comparable store sales growth of 4.7%."
What else did the company say?
Also failing to give the Baby Bunting share price a lift was its online sales growth. The company reported strong online sales growth despite cycling a period of explosive growth a year earlier. The release explains that online sales (including click & collect) are up 37.7% year-to-date. During the prior corresponding period, its online sales rose 126%.
Another positive is that the company's margins continue to widen. Baby Bunting reported a gross profit margin up 120 basis points to 38.7% year-to-date. This has been supported by strong private label and exclusive product sales. Private label and exclusive products make up 44.3% of sales year-to-date. This is up from 38% in the prior corresponding period and brings it closer to its long term goal of 50% of sales.
Looking ahead, the company expects to open 6 to 8 new stores in Australia in FY 2022, and two in New Zealand towards the end of FY 2022.
Management also revealed that the transformation program is progressing well. It is anticipating the launch of its new Australian website and phase 2 of its loyalty program in early November.
Due to COVID-19, no guidance was given at the AGM.
Mr Spencer explained: "Governments are progressing along their roadmaps for re-opening which is a positive. Nevertheless, there remains uncertainty about the business and trading conditions that will prevail in different parts of Australia. Accordingly, guidance for the rest of the year ahead cannot be given at this time."
The Baby Bunting share price is up 12% in 2021.
