Global brokerage Citi expressed concern over the recent noticeable drop in Baby Bunting (ASX:BBN) sales growth, contrary to its expectation of improvement following the FY23 result.

The Australian retailer’s total sales for the year to date have decreased by 3.3% compared to the previous corresponding period.

This was attributed to pressure on discretionary spending and affordability.

Consequently, Citi reduced the BAB price target from A$2.20 to A$2.00 per share and downgraded the stock to Neutral status.

Furthermore, Citi underscored the importance of having convincing strategies to invigorate falling sales.

Citi also trimmed its FY24 to FY26 core net profit after tax estimate by 3% to 6%, citing sluggish sales momentum.

Nevertheless, the broker is optimistic about improving sales momentum in FY25 based on underlying earnings assumptions.

Of the seven analysts assessing the stock, five rate it as buy or higher, and two rate it as hold, with a median price target (PT) of A$2.35, according to LSEG data.

Baby Bunting shares were down roughly 0.8% as of 0306 GMT, reflecting an overall fall of about 26.2% this year, up to the last close.

Baby Bunting is an Australian retailer specializing in infant products.