Net revenue for Bubs Australia fell 9.8 per cent to $23.1 million in Q1 FY27, with operating cash outflow widening to $6 million from $4.4 million on the prior corresponding period.
The infant formula maker said the cash outflow reflected delayed re-entry into Singapore and Vietnam, timing differences between sell-in and sell-out, and investment in raw material inventory to support growth. It drew $3 million on its NAB trade refinance facility during the quarter.
Bubs ended September with $6.4 million in cash and $7 million undrawn on its $20 million facility, which carries an 8.62 per cent interest rate and matures in August 2027. Its Appendix 4C shows 2.2 quarters of funding at the current rate of cash burn.
US currency hit
US net revenue was $15.3 million, down from $16.8 million, with $1.2 million of the fall due to the Australian dollar averaging US .71 cents against .65 cents pcp. In US dollars, revenue slipped 1.8 per cent to US$10.8 million.
Strong growth at Walmart and Target was offset by lower sales to Amazon, which Bubs attributed to a lower period of replenishment than a year earlier.
Consumer sell-through on Amazon rose more than 14 per cent year on year, US retail scan sales hit a record, up 46.5 per cent, and Bubs made its first sales through the CVS drug channel. Its products are now in more than 12,000 US stores.
In September, Bubs secured permanent FDA authorisation for its Goat, 365 Day Grass Fed and Essential infant formulas. The company said it is the only Australian infant formula manufacturer with this authorisation, which could also open the door to private label supply, subject to further regulatory, technical and commercial milestones.
Bubs CEO and managing director, Joe Coote, said, “Our priority is to make that distribution work harder through targeted marketing that builds awareness and converts consumer interest into sales and realise the benefits of the inventory investment.”
Asia and Australia
China revenue edged up to $2.6 million from $2.5 million as channel sell-in and sell-through normalised.
Australian revenue fell to $4.1 million from $4.4 million on cost-of-living pressure and softer trading, while Rest of World revenue dropped to $1.2 million from $1.9 million.
Bubs paused trading in Vietnam and Singapore in the second half of FY26 to meet new regulatory requirements, a disruption that cost $3.9 million in FY26. It said July was the weakest month of the quarter, when residual impacts of this “regulatory reset” were most pronounced, and it has since shipped initial resupply to relaunch in Vietnam.
Coote said, “Australia remains affected by cost-of-living pressures and softer trading conditions, although we are seeing early signs of recovery. Our focus is on balancing cash flow with targeted investment in growth across our strategic markets.”
