Bubs Australia recorded 9.2 per cent revenue growth in FY26, driven by a 24 per cent increase in its US business, but higher airfreight, regulatory and tariff costs pushed the infant nutrition company to an EBITDA loss of $1.8 million.
Group revenue increased to $111.9 million, up from $102.5 million in FY25. Underlying EBITDA increased from $1.2 million to $5.3 million, while reported EBITDA fell from a $5.2 million profit in FY25 to a $1.8 million loss.
The company excluded $3 million in temporary airfreight costs, $3.9 million associated with its regulatory reset, and $1 million in non-Australian tariff costs from underlying EBITDA.
Gross profit declined 9.4 per cent to $44.5 million, with gross margin falling from 47.8 per cent to 39.8 per cent. Bubs said increased airfreight, regulatory and tariff-related costs, primarily incurred during the second half, weighed on the result.
The US now accounts for almost 59 per cent of group revenue, with its revenue up 24 per cent from $53.1 million to $65.8 million, driven by demand in the premium goat segment, expanded store distribution and the company's focus on continuity of supply.
China revenue was flat at $21.4 million, with increased consumer demand offset by inventory rebalancing and regulatory changes affecting customs clearance and testing.
Bubs Australia CEO, Joe Coote, said FY26 marked important progress against the company’s growth strategy.
“FY26 marked important progress against our growth strategy, delivering revenue growth of nine per cent and strengthening the foundations for future growth. This was driven by continued momentum in the US, where revenue increased as we expanded distribution to more than 10,000 stores across targeted retail formats.
“During the year we rebuilt inventory levels, expanded distribution channels, launched adjacent products, increased brand investment and strengthened our leadership team to support future growth.
“This progress was achieved despite a challenging operating environment, with changing tariff policies, geopolitical disruption and evolving regulatory requirements increasing supply chain costs and affecting product availability, particularly in the second half,” Coote said.
Australian revenue declined seven per cent to $18.3 million, from $19.8 million, due to competitive pressures, temporary supply constraints and what Bubs described as “brand repositioning challenges”. The company increased brand activation during the second half to rebuild momentum.
Rest of World revenue fell 25 per cent to $6.4 million. Trading in Vietnam and Singapore was paused during the second half while Bubs worked to meet new regulatory requirements.
Operating expenses increased five per cent to $48.8 million, driven by increased marketing expenditure.
Net working capital rose $12.3 million to $35.5 million as Bubs rebuilt inventory levels to restore supply and support growth. The company said its restocking program was now complete, with its net working capital-to-sales ratio normalising to 31.7 per cent.
For the first half of FY27, Bubs expects positive revenue growth but said regional performance would remain mixed. Bubs is also continuing the US Food and Drug Administration approval process, which it said remained on track and was central to its longer-term US growth plans.
