Bubs Australia Limited reported a solid FY25 with $102.5 million revenue and outlined ambitious FY26 guidance targeting up to $125 million, driven by overseas markets and strategic investments.
- FY25 revenue reached $102.5 million with 48% gross profit margin
- 81% of sales generated from overseas markets, led by USA (52%) and China (21%)
- FY26 guidance projects $120–125 million revenue and $1–2 million EBITDA
- Inventory rebuild and marketing investments to support growth
- Strategic focus on brand evolution, portfolio optimization, and supply chain excellence
Strong FY25 Performance Sets Stage for Growth
Bubs Australia Limited has delivered a commendable financial performance for FY25, posting revenue of $102.5 million and a robust gross profit margin of 48%. The company’s underlying EBITDA was modest at $0.6 million, reflecting a period of focused operational management and strategic investment. Notably, 81% of sales were driven by international markets, with the USA accounting for over half of total sales and China contributing a significant 21%. This global footprint underscores Bubs’ growing presence in key infant nutrition markets.
FY26 Guidance Signals Ambitious Growth Trajectory
Looking ahead, Bubs has set FY26 revenue guidance between $120 million and $125 million, representing a 22–27% increase over the prior year. The company anticipates gross profit margins to range between 40% and 45%, with EBITDA expected to improve to $1 million–$2 million. This outlook is underpinned by a strategic inventory rebuild, with an additional $15–20 million in stock planned to support sales growth and reduce lost sales through expedited replenishment efforts.
Strategic Investments and Operational Enhancements
Bubs is actively investing in marketing and capability building, particularly in digital channels and key geographies such as the USA, China, and Australia. The company is also enhancing its supply chain through operational excellence initiatives and technology deployments aimed at improving traceability and efficiency. Strategic hires in sales, marketing, and corporate services reflect a commitment to strengthening go-to-market capabilities and customer engagement.
Brand Evolution and Portfolio Optimization
Central to Bubs’ strategy is evolving its brand identity to emphasize its Australian heritage and science-backed, gentle nutrition products. The company is optimizing its product portfolio across strategic, growth, and partner markets, focusing on goat and bovine-based formulas. Deepening channel partnerships and exploring category adjacencies and manufacturing diversification are also key priorities to drive margin expansion and scale efficiencies.
Navigating Challenges Amid Macro Uncertainty
While Bubs benefits from strong brand equity and low debt levels, it faces ongoing challenges including geopolitical volatility, regulatory scrutiny; particularly the final stages of FDA review; and competitive pressures in the infant nutrition sector. The company’s proactive approach to inventory management, marketing spend, and supply chain resilience aims to mitigate these risks while positioning Bubs for sustainable growth.
Bottom Line?
Bubs Australia’s FY26 ambitions hinge on executing strategic investments and navigating regulatory hurdles to unlock its full growth potential.
Questions in the middle?
- How will ongoing FDA review outcomes impact Bubs’ US market expansion?
- What is the expected timeline and impact of the planned inventory rebuild on cash flow?
- How effectively can Bubs convert increased marketing spend into sustained consumer growth?