Infant and baby goods retailer Baby Bunting says its first-quarter performance has been “below expectations” in a trading update.

In the year-to-date data to October 7, sales grew 12 per cent, with transactions up by 15.2 per cent.

Comparable-store sales growth was 7.6 per cent while online sales represented 19.6 per cent of overall revenue, compared to 28.6 per cent in the same period last year.

At the company’s annual meeting, Matt Spencer, Baby Bunting’s CEO & MD, said the retailer is currently focused on growing its market share, emphasising on providing “value” in a competitive environment.

“Over the last few years, we have made significant gross margin gains. However, in the first quarter, the gross profit margin was 37.2 per cent, which is down 230 basis points against the first quarter of FY22.

He added the business has suffered “unrecovered cost increases” where input costs have risen faster than retail prices like higher domestic freight charges and foreign exchange movements.

“Given the continuing economic uncertainty, inflationary pressures and other global challenges, we will not be providing any further guidance about FY23 earnings at this time.”

The retailer opened three new stores during the first quarter and anticipates opening another five this year. A Baby Bunting marketplace will be launched in the second half of this year.