Bubs Australia (ASX:BUB) guides $115m revenue as the US store ramp gets real

Air freight bit into EBITDA, but the July 2026 retail footprint reshapes the thesis

Bubs Australia (ASX:BUB) has handed investors an FY26 trading update that does two things at once. It confirms the baby food company is still growing in a market chewing up most of its competitors, and it confirms that growth is costing more to deliver than management would like.

Revenue is guided to $105 to $115 million for FY26. Underlying EBITDA lands at $4 to $8 million, with reported EBITDA flat at roughly negative $2 million to positive $2 million. The gap between the two numbers is where the actual story sits.

Air freight costs to keep US shelves stocked, Middle East shipping disruption, and tighter regulatory requirements have all eaten into reported earnings. The underlying business kept growing through it. The question for investors is whether the July 2026 milestone of ranging in over 10,000 US stores justifies wearing these costs now.

We have followed this name for years through China collapse, boardroom turmoil, and the temporary US market access that became the lifeline. This update suggests the US bet is finally translating into scale.

The US ramp is now the entire investment case

The 10,000-store ranging target for July 2026 is the number every Bubs investor should be circling. That kind of footprint moves the company from a niche premium infant formula brand into genuine mass-market US distribution.

Air freight was used to make sure shelves did not go empty during the ramp. That is a deliberate trade. Pay more on logistics now to protect the retailer relationships that unlock the bigger store count later.

Management has flagged that air freight is now concluding. If sea freight resumes at scale without disrupting service, the margin compression in FY26 should not repeat in FY27.

The FDA review is the catalyst sitting underneath the numbers

Bubs entered the US in 2022 under emergency access during the Abbott-led infant formula shortage. That access was always temporary, and permanent FDA approval has been the overhang ever since.

Today’s update says engagement with the FDA remains positive and the review is in its final stages. Investors have heard variants of this for several reporting cycles, so we would want confirmation before pricing it in. But final-stage language from a careful management team is meaningful.

If permanent approval lands while the 10,000-store rollout is underway, Bubs has done something almost no other ASX infant formula name has managed. It has built a second leg outside China that does not depend on regulatory goodwill.

The reported versus underlying EBITDA gap deserves scrutiny

A $6 million gap between reported and underlying EBITDA is not trivial on a company of this size. Investors should treat the underlying number as the management view of normalised earnings, not as a guaranteed run-rate.

The skeptical read is that air freight, geopolitical disruption, and product availability constraints are not strictly one-off items in consumer staples. They are recurring features of operating across borders.

The constructive read is that even with all of those headwinds, the business still produced positive underlying EBITDA on $105 to $115 million of revenue. That is a different Bubs to the one that nearly imploded in 2023.

The Investors Takeaway for Bubs Australia

FY26 is a transition year by management’s own framing. The investment thesis from here rests on three things landing in roughly the right order. The July 2026 store-count target, the FDA decision, and the unwinding of air freight costs as sea freight normalises.

We think the underlying EBITDA figure matters less than the distribution milestone. If Bubs is in 10,000 US stores by July and the FDA approval converts, the conversation in 12 months looks very different. If either slips, the air freight costs become a more uncomfortable story.

Investors can read our previous coverage of how Bubs rebuilt a post-China future at stocksdownunder. The next quarterly should tell us whether the rebuild is working.