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It's a banner day for the shares of a notable A2 Milk Co Ltd (ASX: A2M) rival. While A2 Milk shares have risen 2.33% in early afternoon trade on Thursday, Bubs Australia Ltd (ASX: BUB) has seen a dramatic surge of 16.67%, trading at 14 cents per share. As of writing, Bubs shares have settled slightly but still boast an impressive 18.8% increase. In contrast, the All Ordinaries Index (INDEXASX: XAO) is up 0.56% during the same period.
Bubs Australia Steals the Spotlight
The catalyst for Bubs' remarkable surge is its recent announcement that weekly scan revenues in the United States have exceeded US$1 million, with over 24,000 tins sold. This represents a 25% increase from the average weekly scan revenue of US$750,000 reported in the third quarter.
Moreover, Bubs has climbed from the sixth to the number one best-selling infant formula product on Amazon USA as of May 2024, further bolstering investor confidence. The company has also made significant strides in securing a permanent access pathway through the Food and Drug Administration (FDA), with over 300 infant enrolments, meeting 75% of its target.
CEO Commentary and Future Outlook
Bubs CEO Reg Weine commented on the robust performance, stating, "We are continuing to see exceptionally strong demand for our products in the USA, and we have now reached a new weekly scan sales record with revenue exceeding US$1 million."
Weine also highlighted the sustained demand across the United States, noting, "We are seeing sustained demand for our products right across the USA, from more than 5,800 bricks and mortar retail stores stocking Bubs."
Looking ahead, Weine expressed optimism about meeting rising demand and overcoming previous stock shortages. "We have recently increased our target inventory levels in the US to meet the rise in demand and believe this strong and sustained consumer-driven demand will provide a strong tailwind for growth in FY 2025."
Weine also provided positive news on the company's China operations, stating, "Our China business has now rebounded."
Comparative Performance with A2 Milk
Despite Bubs' impressive surge, A2 Milk shares have performed exceptionally well throughout 2024, up nearly 65% year-to-date. Bubs, with its recent gains, is up 8% for the year.
