Bubs Australia returns to profitability in first-half; shares surge

Investing.com– Shares of Bubs Australia Ltd (ASX:) surged on Wednesday after the infant formula maker reported a turnaround to profit and strong revenue growth for the first half of fiscal 2025.

The company posted earnings before interest, tax, depreciation, and amortization (EBITDA) of A$2.9 million ($1.8 million) for the first half ended Dec. 31, compared to a loss of A$6.8 million in the prior corresponding period.

Total (EPA:) group gross revenue for the second quarter climbed 42% year-on-year to A$32.9 million, supported by strong performances in key markets, including the United States and China.

Shares of the company surged 22.5% to A$0.12 as at 02:04 GMT.

In its U.S. operations, Bubs reported quarterly revenue of A$17.2 million, a 26% increase from the previous year. The company highlighted robust momentum in its retail channels and the successful transition to higher-margin, redesigned product packaging.

Meanwhile, in China, revenue surged 68% year-on-year to A$7.1 million, driven by expanding distribution through online-to-offline mother and baby stores.

The company reaffirmed its full-year revenue guidance of A$102 million and gross margin exceeding 40%.

CEO Reg Weine said the results underscored Bubs’ strong progress against its strategic priorities.

“We are currently developing our optimal market entry strategy for Canada and while we previously envisaged a soft market entry launch in H2 FY25, we now expect to commence selling Bubs products in Canada in FY26. ” he added.