Bubs Australia expects FY26 revenue between $105 million and $115 million, with underlying EBITDA forecast at $4 million to $8 million despite external challenges including regulatory delays and increased air freight costs.
- FY26 revenue guidance of $105–115 million
- Underlying EBITDA expected between $4–8 million
- Supply chain disruptions and geopolitical tensions impact earnings
- US market remains key growth driver with 10,000+ store target
- FDA review progressing to final stages
Revenue Growth Tempered by External Pressures
Bubs Australia Limited (ASX:BUB) has revised its FY26 revenue guidance down to a range of $105 million to $115 million, reflecting a cautious stance amid ongoing external headwinds. While the company still anticipates underlying EBITDA between $4 million and $8 million, reported EBITDA could swing from a small loss to a slight profit, highlighting the financial strain from supply chain and geopolitical disruptions.
These challenges include evolving regulatory requirements, product availability constraints, and geopolitical instability in the Middle East, which have forced Bubs to rely on more expensive air freight options to maintain inventory levels. This operational complexity has increased short-term costs, a factor the company acknowledges as it prioritises sustaining growth momentum.
US Expansion Remains Central to Strategy
Despite these hurdles, Bubs continues to lean heavily on the US market, which remains its strongest growth engine. The company is on track to secure distribution in over 10,000 US stores by July 2026, a milestone that underscores its ambition to deepen market penetration. CEO Joe Coote emphasised that the increased air freight usage to support restocking in the US is winding down, signalling a return to more cost-efficient logistics as customer service remains a priority.
This focus on the US market builds on earlier momentum, where Bubs delivered a 48% surge in US revenue in the first half of FY26, driving a 14% overall revenue increase for the group. However, the current update reflects a tempered outlook compared to prior expectations, with the company adjusting guidance downward from the $120–125 million revenue range projected earlier in the year underlying EBITDA jumps to $4.4 million.
Regulatory Review and Financial Discipline
Bubs reports positive engagement with the US Food and Drug Administration (FDA), with the review process advancing to its final stages. While the outcome remains uncertain, the company’s progress on this front is critical for unlocking further growth potential in the US market. The FDA’s approval status has been a focal point in recent updates, with Bubs previously anticipating approval by the end of 2025, a timeline that now appears to be extending into FY26 FDA approval process progressing.
Financially, Bubs maintains a strong balance sheet and liquidity position, which management views as essential for navigating near-term volatility. The company’s disciplined approach to supply chain management and investment in brand activation aims to convert existing demand into sustainable growth despite the challenging external environment.
Bottom Line?
Bubs’ FY26 update reveals a company balancing growth ambitions with operational headwinds, making FDA approval and US market expansion key catalysts to watch.
Questions in the middle?
- How will the final FDA review outcome impact Bubs’ US growth trajectory?
- Can Bubs sustain underlying EBITDA growth amid ongoing supply chain pressures?
- What strategies will Bubs deploy to mitigate geopolitical risks and regulatory complexity?