Why is the Bubs share price taking off today?

Bubs shares are starting the week on a positive note.

| More on:
happy man feeding baby in the home kitchen

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Bubs shares accelerate 4.03% to 64.5 cents after the company provided a positive update to the ASX 
  • Management highlighted it entered into supply agreements with two new United States-based supermarket chains 
  • In addition, after a number of discussions, Bubs infant formula products will receive the benefit of tariff concessions under the AUSFTA Agreement 

The Bubs Australia Ltd (ASX: BUB) share price is edging higher today following a market update from the company.

At the time of writing, the infant formula company's shares are fetching at 64.5 cents apiece, up 4.03%.

Let's take a look at what management provided to the ASX this morning.

What did Bubs announce?

In its update released to the ASX, Bubs advised it entered into supply agreements with two new retail groups.

This comes ahead of the fourth plane delivery to the United States scheduled on 6 July under the Operation Fly Formula. Management noted that all 90,000 baby formula tins onboard worth $3 million in gross revenue have been presold.

The supply agreements are with a supermarket chain based in Texas, H-E-B Grocery Company, and American supercentre chain, Meijer.

Furthermore, 22 state agencies in the US have authorised Bubs Infant Formula products as suitable under the WIC program.

The WIC program is a special subsidy supplement nutrition program from the United States Government for women, infants and children.

Evidently, this opens the door for Bubs products to hit more retailers across the country.

On another note, management noted that Bubs infant formula products will receive the benefit of tariff concessions under the AUSFTA Agreement.

This comes after the United States and Australian Government held discissions surrounding the correct tariff classification of Bubs Infant Formula products.

Bubs founder and CEO, Kristy Carr commented:

We are grateful for the opportunity to assist parents under the WIC Program. As Bubs continues to replenish retailer shelves with up to six Bubs Infant Formula products, it is comforting that many more American parents will have the opportunity to access our clean nutrition that is and will continue to be available on shelves.

We are thankful to the U.S. and Australian Government for their assistance in helping us understand our tariff obligations. It is great to see that the strong trade relations and reciprocal recognition of food standards between the two countries have reflected in greater market access for our category, particularly during this time of crisis for American families.

Bubs share price summary

Despite a difficult 12 months amid COVID-led channel disruptions, the Bubs share price has gained 40% over the period.

The company's shares touched a 52-week high of 86 cents on the back of the supply agreement with the United States.

However, since then, its shares have retraced due to market volatility across the ASX which weighed down Bubs shares.

Based on valuation grounds, Bubs commands a market capitalisation of around $379.92 million.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BUBS AUST FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Consumer Staples & Discretionary Shares

A beautiful woman wearing make-up and long strings of pearls around her neck sits on a luxury old-style chair with an antique lamp beside her as she smiles happily with her head in the air as though she is very satisfied with something.
Consumer Staples & Discretionary Shares

I'd love to buy more Wesfarmers shares, but I won't right now. Here's why

It's hard to buy Wesfarmers when it's more expensive than Google...

Read more »

Couple look at a bottle of wine while trying to decide what to buy.
Consumer Staples & Discretionary Shares

Why is the Endeavour share price trading at all-time lows?

Let's take a look.

Read more »

domino's pizza share price
Consumer Staples & Discretionary Shares

Should I buy Domino's shares before the New Year?

Are Domino’s shares a good buy for 2025 after tumbling 50% in 2024?

Read more »

A man holds his hand under his chin as he concentrates on his laptop screen and reads about the ANZ share price
Consumer Staples & Discretionary Shares

Kogan shares worth $17 million sniffed by corporate watchdog

A well-timed and lucrative sale has the regulator intrigued.

Read more »

A man folds his arms as he stands amid a stack of used tyres.
Share Market News

Here's how the ASX 200 market sectors stacked up last week

The consumer staples sector came out best during a poor week of trading for the ASX 200.

Read more »

supermarket asx shares represented by shopping trolley in supermarket aisle
Consumer Staples & Discretionary Shares

Is the Coles share price a buy amid its 2025 outlook?

With its outlook in mind, are Coles shares a bargain?

Read more »

asx company executive with multiple fingers all pointing at him
Consumer Staples & Discretionary Shares

Woolworths shares slip amid criminal charges laid in NZ

The supermarket is in hot water across the ditch.

Read more »

Woman and 2 men conducting a wine tasting
Consumer Staples & Discretionary Shares

Treasury Wine share price jumps on big China news

The popular Penfolds brand may have found its home in China.

Read more »