Bubs Australia recorded $19.7 million in revenue for 1Q25, down 0.3 per cent on the prior corresponding period (pcp) of $24.3 million. The company reconfirmed its FY25 guidance of $102 million net revenue, gross margin more than 40 per cent, and a break even EBITDA.
Snapshot
- October group gross revenue: $11.8m, up 121 prior corresponding period (pcp);
- October YTD FY25 group gross revenue: ~$36m, up 20% pcp; and
- Record weekly sales in US bricks and mortar stores: +US$1.3m in w/ending 10/10/2024.
Regional gross revenue highlights
- US: $11.3m, down 3% pcp;
- China: $4.3m, up 15% pcp;
- Australia: $6.1m, down 19% pcp; and
- ROW: $2.4m, up 86%.
Bubs CEO and managing director, Reg Weine, said it was a “strong” start to FY25, with group gross revenue up 20 per cent on the first four months trading of FY24.
“In Q4 FY24, we rolled out our new look labels and new pack formats in the USA which, as we flagged in our July 2024 4C release, would impact US Q1 ex-factory sales as we transitioned from the old tins to the new tins.
“Since launch, we have seen week on week improvement in the run rate and uptake of our new products which is very encouraging and, in October, we achieved a record week of over US$1.3 million in sales in bricks and mortar stores. The acceleration in US scan sales has continued strongly in October contributing to monthly group gross revenue of $11.8 million, up around 121 per cent on pcp,” Weine said.
The China market picked up in 1Q25, with 200 new O2O stores starting to stock Bubs products. Weine said the company was preparing for the upcoming Singles’ Day on 11 November, which is a hallmark of the Chinese shopping calendar and largest eCommerce promotion event in the country.
Bubs remains the dominant brand in domestic goat infant milk formular, with 55 per cent market share and a growth rate of 12.1 per cent compared to 2.2 per cent for the overall market.
“Gross margin in the first quarter has been strong at 43 per cent, exceeding our target gross margin of 40 per cent. Profit margins are expected to improve over FY24, as we focus our sales strategy on a higher margin product mix in our key markets and sales channels.
“We are confident we will meet or exceed our target FY25 gross margin of 40 per cent. Overall, we remain on track to achieve our group net revenue, gross margin and EBITDA guidance for the full year,” Weine said.
New CEO appointed
Naomi Verloop has been appointed Bubs CFO and will start in the role on 10 February 2025. Bubs current financial controller, Aaliyah Nyathi, will act as interim CFO until then.
Verloop has CFO and executive experience in manufacturing and agriculture in Australia, the Netherlands, and the US, for ASX and multinational businesses including Barenbrug Australia, Nuseed, and KPMG.
Bubs CEO and MD, Reg Weine, said Verloop was a “well credentialled financial leader”.
“Most recently she was the CFO and head of IT for a large agricultural business in Australia, with extensive offshore experience including the Netherlands.
“Naomi has previously had responsibility for the supply chain function and has demonstrated success in working capital management and driving profitability improvements,” Weine said.
