Highlights

  • Bubs Australia (ASX:BUB) reported FY26 revenue of AUD 111.9 million, up 9.2%.
  • United States revenue rose 24% to AUD 65.8 million, and distribution expanded to more than 10,000 stores.
  • Underlying EBITDA was AUD 5.3 million, while gross margin fell to 39.8%.
  • The company received permanent US FDA authorisation for three infant formula products in September 2026.

Bubs Australia Limited is an infant nutrition company, founded in 2006, that sells organic and specialty infant formulas, including goat milk and grass-fed options. Its FY26 results, released in August, were followed by a regulatory milestone in the United States in September.

Company Business

Bubs is headquartered in Dandenong South, Victoria, and sells in Australia, the United States and China, with a growing presence in other international markets. Its range includes Bubs Goat, Bubs 365 Day Grass Fed and Bubs Essential formulas.

For Bubs Australia (ASX:BUB), the United States is now the largest revenue region, ahead of China and Australia. Regulatory compliance, freight, inventory management and retail distribution therefore have a direct bearing on results, because infant formula is a closely regulated category in each market where the company operates.

Recent Development

In late August 2026, Bubs reported results for the year ended 30 June 2026. Group revenue rose 9.2% to AUD 111.9 million, within the AUD 105 million to AUD 115 million guidance range. Fourth-quarter revenue of about AUD 30.9 million was up 11% on the prior corresponding quarter.

By region, United States revenue increased 24% to AUD 65.8 million, China was flat at AUD 21.4 million, Australia fell 7% to AUD 18.3 million and Rest of World fell 25% to AUD 6.4 million. Bubs said it rebuilt inventory, launched adjacent products and increased brand investment during the year.

In early September 2026, the company announced permanent authorisation from the United States Food and Drug Administration to supply three infant formula products, covering the products, manufacturing systems and scientific evidence. Bubs said it is evaluating participation in the United States private label infant nutrition segment, subject to further regulatory, technical and commercial milestones. An investor webinar followed on 10 September.

Financial Performance and Sector Context

Gross margin fell to 39.8% from 47.8%, and gross profit declined 9.4% to AUD 44.5 million. The company attributed the decline mainly to higher airfreight, regulatory and tariff costs in the second half. Operating expenses rose 5.0% to AUD 48.8 million, driven by marketing.

Underlying EBITDA was AUD 5.3 million, compared with AUD 1.2 million on a restated basis. It excludes airfreight costs of AUD 3.0 million, regulatory reset costs of AUD 3.9 million and non-Australian tariff costs of AUD 1.0 million. Reported EBITDA was a loss of AUD 1.8 million, compared with a profit of AUD 5.2 million.

Bubs Australia (ASX:BUB) held cash of AUD 9.4 million at 30 June 2026, with AUD 10.0 million of undrawn debt facilities, and the NAB facility was extended to 31 August 2027. Net working capital rose AUD 12.3 million to AUD 35.5 million, reflecting inventory restocking that the company says is now complete. Operating cash outflow for the year was AUD 16.8 million.

For the first half of FY27, Bubs expects improved momentum and positive revenue growth, continued growth in the United States, support for China from wider distribution and marketing, further marketing investment in Australia and a rebound in gross margin. Bubs describes the United States infant formula market as among the world's largest and most highly regulated consumer categories.

Risks to Consider

Bubs Australia (ASX:BUB) faces exposure to regulatory change, tariffs, freight and supply chain costs, and the timing of product releases and customs clearance. Revenue is concentrated in the United States and China, so retailer decisions and trade conditions in those markets matter. Gross margin recovery depends on freight, regulatory and tariff costs easing, and the company funds inventory through working capital and debt facilities. Declines in Australia and Rest of World show that regional performance can differ materially.

What to Watch Next

The company will convene its 2026 annual general meeting on 18 November 2026, and the notice of meeting and 2026 annual report were released in October. Bubs has lodged quarterly cash flow reports at the end of each quarter, most recently on 31 July 2026, so its next quarterly update is a further point to follow. Other monitoring items include first-half FY27 revenue, gross margin, United States distribution, any private label developments and cash flow.

Key Insights

Bubs Australia (ASX:BUB) closed FY26 with higher revenue, led by the United States, but lower gross margin and a reported EBITDA loss. Permanent FDA authorisation addresses a regulatory milestone, while the balance sheet carries modest cash alongside undrawn facilities. Margin recovery, regional performance and cash flow are the main variables to track.