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Highlights
Bubs Australia upgraded its revenue and earnings guidance for FY2022.
Bubs now expects gross revenue to be more than AU$100 million for the given fiscal.
Bubs was recently tasked with exporting 1.2 million tons of its infant formula to the US.
Bubs Australia Ltd (ASX:BUB) has upgraded its revenue and earnings guidance for the financial year 2022 on account of strong demand in Australia, China and the US. The ASX-listed infant nutrition and dairy specialist now expects gross revenue to be more than AU$100 million for fiscal 2022, with at least a 100% rise in underlying earnings before interest, tax, depreciation and ammortisation (EBITDA).
In February, Bubs had guided for modest growth on the first half’s AU$38.5 million in gross revenue and AU$1.2 million underlying EBITDA.
Meanwhile, Bubs was recently tasked with exporting 1.2 million tons of its infant formula to the US amid critical supply shortages. The company has sent more than 1 million tins to the US.
What did Bubs’ management say?
Bubs’ management was upbeat about the future performance of the company as all key product segments, including Bubs® A2 Beta-Casein Protein, Organic Grass-Fed, and Easy-Digest Goat Milk Infant Formula ranges were performing on a strong note in the three geographies.
“Due to a strong momentum in China and the unanticipated volume of sales in the USA, complemented by Bubs' demonstrated agility and speed to respond to the call for action with first-mover advantage, fourth-Quarter turnover is likely to be higher than originally anticipated,” said Bubs’ Founder and CEO, Kristy Carr.
“It has been an extraordinary journey for Bubs to have had over 12 months of in-market experience to provide the first response to the USA’s infant formula shortage, which is likely to change the industry’s landscape in the USA. This has significantly accelerated our entry into one of the largest infant formula markets in the world, and we look forward to introducing more American families to Bubs' full range of products,” added Carr.
Bubs’ share price snapshot
Following the guidance upgrade, shares of Bubs were trading at AU$0.62, up 1.65%. In the past year, the share price has risen nearly 62%. The stock is up over 28% on a year-to-date (YTD) basis. In the past month, the share price has risen over 43%.
Key highlights of Q3 FY22 quarterly activities report
- Gross revenue of AU$17.6 million in Q3 was up 49% pcp (previous corresponding period, marking the third quarter of growth over the previous year)
- Positive pcp growth momentum in all important business pillars: global, domestic and China.
- Domestic retail infant formula sales rose 108% on pcp.
- Bubs achieved a market share of 4.2% of the entire infant formula category.
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