It's very common and normal for babies (boys and girls) to have mild or even impressively swollen, enlarged breasts and/or lumps under the nipple. They are almost always benign and due to exposure to maternal hormones in the womb.
Causes of Newborns' Enlarged Breasts and Lumps in Newborns
In the womb, babies are exposed to all of their mother's hormones. The same hormones that cause the mother's breasts to swell and milk glands to be stimulated can do the same to the baby's breasts.
These lumps and enlarged breasts in the baby may be quite noticeable at birth. They might even continue to grow after birth for a while. If you were to pinch them, some real breast milk may be expressed.
Over weeks, or sometimes even months, when there is no more exposure to the hormones, the breast tissue begins to shrink and eventually becomes quite flat. Occasionally a normal, small nubbing of tissue remains, but it doesn't grow or cause discomfort.
Tips for Concerned Parents
Sometimes overly worried parents touch and pinch the breasts so much that the area gets irritated. Leave them alone and let nature take its course in shrinking them.
When to Worry About Swollen Breasts or Lumps
In the rare case when the breasts look infected (swollen, red, tender, or have a discharge) and the baby has a fever, call your paediatric provider to check if an infection has set in.
WebMD Medical Reference
http://www.webmd.com/parenting/baby/your-newborn-baby-breast-lumps
