Highlights

  • Bubs Australia (ASX:BUB) reported FY26 revenue of AUD 111.9mn, up 9.2% YoY.
  • US revenue rose 24% YoY to AUD 65.8mn as retail distribution expanded.
  • FY26 underlying EBITDA was AUD 5.3mn, while reported EBITDA was a loss of AUD 1.8mn.
  • The company announced permanent US FDA authorisation for its infant formula products in September 2026.

Bubs Australia Limited develops and markets infant formula, toddler nutrition and goat-milk-based products under the Bubs and CapriLac brands. Its FY26 results highlighted a growing US business, costs associated with inventory and regulatory compliance, and subsequent authorisation to supply infant formula permanently in the United States. Bubs Australia (ASX:BUB) shares closed at AUD 0.088 on 26 October 2026, down 3.30% for the session, as the company continued implementing its international distribution strategy.

Company Business

Bubs Australia (ASX:BUB) supplies infant nutrition products using goat milk and cow milk, alongside products for toddlers and adult nutrition. The company sells through retail and distribution channels in Australia, the United States and China, with additional distribution arrangements in other international markets. Its commercial operations include product development, procurement, manufacturing coordination, inventory management and compliance with local food regulations.

The United States is the company’s largest reported market by revenue. Bubs has expanded its presence in supermarkets and other retail outlets, while its Australian business serves domestic infant and toddler nutrition demand. In China, sales depend on cross-border and local distribution pathways, including changes in inventory levels held by customers.

Recent Development

In September 2026, Bubs Australia (ASX:BUB) announced that the US Food and Drug Administration had granted permanent authorisation for its infant formula products in that market. The approval followed a regulatory process affecting the company’s US business and allows it to pursue continued supply under the applicable framework. The company also issued an FDA-related presentation outlining the development and commercial context of the authorisation.

The FY26 annual report, released in October 2026, described an expansion in the company’s US distribution footprint from approximately 4,000 to more than 10,000 retail locations. In Australia, management increased marketing activity during the second half of the financial year following supply constraints and competition. In China, inventory rebalancing affected orders despite continued consumer demand.

Bubs also reported that temporary regulatory changes affected availability in some other overseas markets. Management has been working on packaging and compliance modifications to support future product shipments. These operational initiatives sit alongside its focus on supply continuity and working-capital management.

Financial Performance and Sector Context

Bubs Australia (ASX:BUB) reported FY26 group revenue of AUD 111.9mn, increasing 9.2% from AUD 102.5mn in FY25. US revenue advanced 24% to AUD 65.8mn, compared with AUD 53.1mn a year earlier. China generated AUD 21.4mn, broadly unchanged year on year, while Australian revenue fell 7% to AUD 18.3mn. Revenue from other international markets declined 25% to AUD 6.4mn.

Underlying EBITDA increased to AUD 5.3mn from AUD 1.2mn in FY25. Reported EBITDA moved to a loss of AUD 1.8mn from a profit of AUD 5.2mn, reflecting temporary airfreight, regulatory and tariff-related expenditure. Gross profit declined to AUD 44.5mn, and gross margin narrowed to 39.8% from 47.8%. Operating expenses increased 5% to AUD 48.8mn, partly reflecting marketing investment.

At 30 June 2026, cash stood at AUD 9.4mn, with a further AUD 10.0mn in undrawn debt facilities. Net working capital reached AUD 35.5mn after the company invested in inventory to restore product availability. Bubs reported that its restocking program was complete. The infant nutrition sector remains subject to food-safety regulation, input costs, retail competition and international trade requirements.

Risks to Consider

Bubs Australia (ASX:BUB) faces exposure to regulatory requirements across infant nutrition markets, including testing, product registration and packaging standards. International tariffs, freight costs and changing customs requirements can affect margins and product availability. Competitive pricing, retailer ranging decisions and inventory requirements may influence sales and cash conversion. Continued expansion also depends on access to funding, manufacturing continuity and the company’s ability to manage working capital.

What to Watch Next

For Bubs Australia (ASX:BUB), subsequent quarterly disclosures will provide evidence of US sales following permanent FDA authorisation, the pace of retail distribution, and cash generation after the FY26 inventory build. Other monitoring points include recovery in Australian sales, normalisation of Chinese customer ordering, regulatory progress in other markets and the effect of logistics and tariff costs on gross margin.

Key Insights

Bubs Australia (ASX:BUB) grew FY26 revenue primarily through its US operations, while reported profitability was affected by regulatory, freight and tariff costs. Permanent US authorisation provides an updated operating framework for its principal growth market. The company’s financial results also highlight the importance of inventory levels, cash conversion and gross margins as it develops its international business.