Australia’s Nascent Baby Boom Could Propel Some Retail Stocks

A possible lockdown-fueled baby boom in Australia has been boosting some retailers that cater to new and soon-to-be parents.

Shares in baby-related retailers have been surging as analysts forecast the country’s birth rate will accelerate after 2020’s coronavirus lockdowns. The increase could extend stock gains for Baby Bunting Group Ltd., Adairs Ltd., Temple & Webster Group Ltd., which have already climbed over the past year.

Signs of a possible birth-rate spike have started to emerge as the number of ultrasound scans in the country gather pace. Diagnostic imaging services for pregnancies between 12 to 16 weeks totaled 67,872 in 2020, up about 10,000 from 2019, according to data from Medicare Australia. The rise comes amid a global baby drought that has worsened during the pandemic and Australia’s first population decline since 1916 due to closed borders.

Australia’s Nascent Baby Boom Could Propel Some Retail Stocks

“With people spending more time at home, working from home and being forced, in a way, to spend more time with their partner, indeed, birth rates are on the up,” said Jessica Amir, a market analyst at Bell Direct Ltd. “Earnings traditionally drive share price growth and what you are seeing is a testament to that.”

Baby Bunting’s management has been monitoring the uptick in ultrasounds, said Carl Capolingua, a market analyst at ThinkMarkets Australia. The company’s shares have jumped 206% over the last year, outperforming the S&P/ASX 300 Index’s 44% advance.

Australia’s Nascent Baby Boom Could Propel Some Retail Stocks

Adairs, which acquired online nursery store Mocka in 2019, is up 613%. Mocka sales rose 49% in the first seven weeks of the current half, Adairs said last month.

Meanwhile, Temple & Webster, an online furniture store that has a “Baby and Kids” product category, has gained 530%.

©2021 Bloomberg L.P.

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