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Highlights
- Bubs Australia Limited further expands its retail infant formula business in US.
- The infant formula maker enters into a supply agreement with Walmart Inc.
- BUB share price jumps over 8% cheering market expansion outside Australia.
Bubs Australia Limited (ASX:BUB), has entered into an agreement with Walmart Inc. (Walmart) furthering its retail footprint in US. Under the agreement, Walmart is to purchase a shipment of six Bubs® Infant Formula products and two Aussie Bubs™ Toddler Formula products. These are to be distributed to about 800 Walmart stores in the US.
Key Highlights of the agreement
- Walmart is to purchase an entire shipment containing around 85,000 tins of Bubs® Infant Formula.
- The products will be supplied via a Boeing 747-400F cargo aircraft chartered by the US Government under its ‘Fourth Operation Fly Formula Mission.’
- Shipment shall include Bubs Supreme™ A2 Beta-Casein Protein, Bubs Organic® Grass Fed, and Bubs® Easy-digest Goat Milk Infant Formula along with Follow-On Formula portfolio.
- The products are expected to supplement Bubs™ Toddler Formula products already sold online with Walmart.
Impact on BUB share price
BUB share price took a visible leap on 30 May 2022 when it secured US FDA’s discretion to immediately import its infant formula products in US. The share price again witnessed a spike on 10 June after the company announced its supply agreements with Kroger and Albertsons. Today again post announcement of supply deal with Walmart, BUB share price has jumped over 8.8% to trade at AU$0.615 a share (16 June, 10:03 AM AEST). On ASX, BUB shares trade in the 52-week price range of AU$ 0.335 to 0.860 a share. Its market capitalisation as of date is around AU$346.21 million. In the past thirty days of trade on ASX, BUB shares have appreciated by around 67%.
Management Commentary
As per Kristy Carr, Founder and CEO, Bubs Australia Limited, by forging a relationship with Walmart, all of Bubs® infant formula and toddler formula products will go on shelf in around 800 stores across central and mid-west America. This would be in addition to Bubs existing online, Walmart.com sales channel. As a result, addition of Walmart will increase Bubs bricks and mortar exposure in US to around 4,800 stores across 35 States.
While Bubs claims to be continuing its work with Australian and other existing global partners, the present deal is to expand its physical retail footprint. The management has therefore also thanked the US government for providing it such an opportunity and for offering ongoing support and guidance.
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