Infant formula and baby nutrition company Bubs Australia has reported a strong improvement in earnings for the first half of FY26, driven by rapid growth in the US market and a favourable product mix.
For the six months to 31 December 2025, group revenue increased 14 per cent to $55.5 million, up from $48.5 million in the prior corresponding period, while underlying EBITDA rose to $4.4 million from $0.5 million a year earlier.
The improvement reflects strong sales momentum in the US, which remains the company’s largest and most profitable market. Revenue in the region increased 48 per cent to $34.2 million, supported by expanded retail distribution and increased store counts for the company’s goat infant formula range.
Total infant milk formula (IMF) sales increased 16 per cent to $48.6 million, reflecting continued demand for the company’s premium natural formula products and improved sales execution across key markets.
Gross margin held relatively steady at 48 per cent, compared with 49 per cent in the previous half, while operating expenses declined three per cent following the completion of the company’s FDA growth study and ongoing cost management initiatives.
Bubs CEO, Joe Coote, said the result demonstrated strong momentum across the business and positioned the company to exceed its full-year commitments.
“We’re pleased with the strong first half momentum and are on track to exceed our FY26 commitments,” Coote said.
“Our revenue and gross profit growth highlight the strength of our brands and the diversity of our business model, with the US our main growth engine as major retailers expand store counts and instore ranging.”
The company said it had continued investing in inventory to support demand growth in the US and China, while also undertaking a rationalisation of its product portfolio and strengthening leadership capability.
Inventory increased to $28.5 million during the half as the company rebuilt stock to support future sales growth. Operating cash flow was negative $5.7 million due to the inventory build, although the company closed the period with $9.9 million in cash and a further $20 million in undrawn debt facilities.
China generated revenue of $7.5 million, reflecting temporary inventory imbalances and short-term supply shortages. Bubs said demand remained strong across cross-border e-commerce and online-to-offline channels, with products now stocked in 1752 stores across 97 Chinese cities.
In Australia, revenue was $9.5 million, with performance affected by stock constraints and intense retail competition.
Rest-of-world markets delivered revenue of $4.2 million, led by Japan and Vietnam, although growth was constrained by regulatory complexities and limited product availability.
Looking ahead, Bubs upgraded its FY26 guidance, forecasting group revenue of $120 million to $125 million and EBITDA of between $4 million and $6 million, with gross profit margins expected in the 40-45 per cent range.
The company said continued expansion in the US infant formula market and improving inventory conditions in China were expected to support growth in the second half of the financial year.
