The Bubs Australia Ltd (ASX: BUB) share price is under the spotlight today after announcing its FY23 first quarter update.
Bubs is a growing infant formula business, and it also provides goat milk based products for adults.
Quarterly update
Bubs announced that its first quarter revenue had increased by 28% to $23.6 million. Infant formula gross revenue more than doubled, it went up 109%.
In Australia, it has achieved a record market share in the retail category, with 56% of the total goat formula category.
Bubs said that the USA highest margin formula gross revenue was $9.6 million, contributing 40% of total first quarter gross revenue.
The USA total market share was 0.4% and 9% of the organic/health formula category in the first 13 weeks.
Bubs infant formula can now be found at Target, Walmart, Kroger, Albertson’s/Safeway and so on.
Amazon.com has invested Bubs to be a ‘direct retailer’ under a first party relationship.
Of the eight international manufacturers that have received FDA exemption, Bubs ranks second and represents around one third of the international brands’ retail scan sales value over the past 13 weeks.
Chinese daigou infant formula first quarter gross revenue increased by 20% year over year.
It also said that a strategic partnership was established to enable SAMR (GB) registration pathway for Bubs’ Chinese label infant formula.
Outlook and thoughts on the Bubs share price
The Bubs founder and CEO Kristy Carr said:
Taken together, the diversification of our infant formula portfolio across goat, organic and a2 protein fast-growing category segments, an exciting acceleration of our US journey, and the development of the M2C model and entry into general trade in China, we remain optimistic about the year ahead.
Bubs is making very fast progress in the US. If it’s able to hang onto its market share, and grow it, then the US could be a very promising market for the market. China and other Asian countries are also very promising.
I think it’s an interesting, high-risk business. But, after falling 20% over the past couple of months, I think it may be worth a look.
