Bubs upgrades guidance as it milks popularity in US and China

The infant nutrition company has had a stellar run in the past month after signing an agreement with the Biden administration to ship 1.25 million cans of formula to the US.

US President Joe Biden speaks with Kristy Carr, founder and boss of Bubs, during a virtual meeting with baby formula manufacturers as Bubs helps ship much needed tins of formula to the US. Kevin Dietsch/Getty Images/AFP == FOR NEWSPAPERS, INTERNET, TELCOS & TELEVISION USE ONLY ==

Infant milk formula company Bubs has lifted its revenue and earnings projections as it rides the wave of US demand.

The ASX-listed infant nutrition and dairy specialist has had a stellar run in the past month after signing an agreement with the Biden administration to ship 1.25 million cans of infant formula to the US, which is suffering from a crippling national shortage.

Now Bubs is gaining the attention of nervous parents in China where a tie-up with local social media star Will Liu is helping to drive brand awareness among his 60 million followers.

Together – growing brand awareness in the US thanks to the airlift of formula and a social media blitz in China – has seen Bubs upgrade its guidance. It expects gross revenue to be above $100m for 2022, subject to scheduled operations occurring without disruption, with at least a 100 per cent increase on the $1.2m underlying earnings reported at the half year.

This compares to its results in February, when Bubs reported gross revenue of $38.5m, up 73 per cent. At that time management provided guidance that the company expected to deliver only modest half-on-half growth in revenue and underlying earnings.

Bubs shares rose more than 9 per cent, or 5.5c, on Friday to close at 66c. The shares have risen more than 60 per cent since it announced it was one of the first international infant milk formula to gain approval from the US government to have its products imported as that country struggles with a huge shortage.

“All key product segments, including Bubs A2 Beta-Casein Protein, Organic Grass-Fed, and Easy-Digest Goat Milk Infant Formula ranges, are performing strongly in Australia, China and the USA,” CEO Kristy Carr said.