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Bubs soars 40% on rebound

Bubs Australia soared almost 40% on Wednesday, after the producer of Australian made specialty infant formula and children’s nutrition products released in first-quarter results for FY22.


After struggling significantly due to uncertainty and weakness from key Chinese markets, Bubs said it has largely put the disruption and challenges of COVID-19 behind, delivering a turnaround to high growth during the quarter as they revamped the company’s business strategy in response to rapidly changing market dynamics.

There now continues to be strong consumer demand for Bubs products in all its key markets with solid performance across core business segments. Bub’s turnaround growth strategy delivered gross revenue of $18.5 million, nearly double the prior year and up 45% on the previous quarter.


Its China-facing business rebounded strongly with total gross revenues increasing by 156% on the same period last year and nearly double the previous quarter. Demand for Bubs Infant Formula surged in the Daigou Channel, up 6.5 times on the prior year and up 265% quarter-on-quarter.


Bubs’ global expansion strategy continues to advance with entities now established in New Zealand, China and North America. International gross revenue outside of China was up nearly five-fold over the same time last year, and up 35% on the prior quarter. The first shipment of Aussie Bubs products arrived in the USA during the quarter and Bubs is now an official Walmart vendor, with the first online sales expected to occur in October 2021.


Looking ahead, the company noted that having recovered the ground lost due to COVID-19 disruption, they expect to be able to sustain the continued growth momentum, to the extent their go-forward approach does not depend on a material improvement in the pandemic setting. However, the effects of the pandemic on the sector may continue to create a degree of uncertainty on future demand.


Bubs Founder and CEO Kristy Carr said: “This transformation reflects the collaboration with our strategic partners to execute our new integrated channel growth strategy built around Bubs' strong brand equity. We have accelerated channel confidence by both restructuring our value chain to deliver enhanced channel margins, and rebalancing channel inventory to meet stabilised demand."