Key Highlights

  • Group Revenue increased 9.2% to $111.9 million, driven by 24% growth in United States revenue to $65.8 million
  • Gross profit margin declined to 39.8% from 47.8% a year earlier, and reported EBITDA moved to a loss of $1.8 million from a profit of $5.2 million in FY25
  • Underlying EBITDA, which excludes airfreight, regulatory reset and tariff-related costs, improved to $5.3 million from $1.2 million
  • Australian revenue declined 7% to $18.3 million and Rest of World revenue fell 25% to $6.4 million amid competitor pressure and regulatory disruption

Bubs Australia Limited (ASX:BUB) reported financial results for the year ended 30 June 2026, with group revenue increasing 9.2% to $111.9 million from $102.5 million in FY25. The growth was driven primarily by the United States, where revenue increased 24% to $65.8 million from $53.1 million, supported by consumer Demand in the premium goat milk formula segment and expanded distribution to more than 10,000 stores across targeted retail formats.

Performance elsewhere in the Business was weaker. China revenue was flat at $21.4 million, as growth in consumer demand was offset by inventory Rebalancing and regulatory changes affecting customs clearance and testing measures. Australian revenue declined 7% to $18.3 million from $19.8 million, reflecting competitor pressure, temporary Supply constraints and Brand repositioning challenges, prompting renewed brand activation in the second half. Rest of World revenue fell 25% to $6.4 million from $8.5 million, with regulatory reset changes affecting product availability and extending customs release timelines, particularly in Vietnam and Singapore, where trading was paused in the second half.

Margin Pressure Drives Reported EBITDA to a Loss

Gross profit decreased 9.4% to $44.5 million, with Gross Profit Margin falling to 39.8% from 47.8% in FY25, reflecting increased airfreight, regulatory and tariff-related costs incurred primarily during the second half. Operating expenses increased 5.0% to $48.8 million, driven by higher Marketing spend to activate the brand. As a result, reported EBITDA moved to a loss of $1.8 million, compared with a profit of $5.2 million in FY25.

Underlying EBITDA, which excludes temporary airfreight costs of $3.0 million, regulatory reset costs of $3.9 million and non-Australian Tariff costs of $1.0 million, increased to $5.3 million from a restated $1.2 million in FY25. The company noted that non-Australian tariffs had been restated within the FY25 comparative figures, having not previously been included in underlying EBITDA.

Working Capital Investment and Liquidity Position

Net Working Capital increased by $12.3 million to $35.5 million during the year, reflecting investment in inventory to restore supply levels and support growth. The company confirmed that its inventory restocking program is now complete, with the net working capital-to-sales ratio normalising to 31.7%. Period-end cash stood at $9.4 million, with a further $10.0 million in undrawn Debt facilities. During the year, the company extended its National Australia Bank Facility through to 31 August 2027.

Outlook for H1 FY27

Bubs said it anticipates improved momentum in the first half of FY27 as the business adapts to the current regulatory and US tariff environment, with regional performance expected to remain mixed: continued growth momentum in the United States, growth supported by expanded distribution and marketing in China, ongoing marketing investment to support recovery in Australia, and mixed conditions in Rest of World markets as product flows improve. The company said gross margin is expected to rebound, supported by a working capital position it considers positioned to support anticipated growth, while it continues to work toward finalising the FDA approval process in the United States.

Conclusion

Bubs Australia's FY26 results reflect a period of continued United States growth being offset by weaker performance in Australia and Rest of World markets, alongside cost pressures from airfreight, regulatory and tariff-related items that pushed the reported EBITDA result into a loss despite an improvement in the underlying measure. The completed inventory restocking program and extended debt facility provide the company with a liquidity base heading into FY27, a period in which management has flagged an expectation of improved momentum and a rebound in gross margin.