Australia Infant Formula Maker Surges on Record Sales After US Deal

Shares of Bubs Australia Ltd. surged after it announced record fourth-quarter sales, as the company ships infant formula to the US to help the country meet a severe shortage of the product.

The company said it delivered 540,000 tins of the infant food to the US between May and July, funded by the government’s Operation Fly Formula.

Bubs will remain on US shelves beyond November and the company expects the nation to become a “lead export market opportunity on par with China in the future,” said Kristy Carr, founder and chief executive officer. “We are confident of the long-term growth prospects for the USA.”

The stock rose as much as 9.4% in Sydney on Wednesday, after the company posted record fourth quarter gross revenue of A$48.1 million ($33.3 million), up 278% year on year, according to a market update. It is the fourth consecutive quarter of growth on prior year, with shares up around 23% in 2022.

Bubs shares surged as much as 77% on May 30, after the Food and Drug Administration said the company would provide the US with at least 1.25 million cans of formula.  

New Zealand formula maker A2 Milk Co. also benefited from Wednesday’s news, jumping as much as 4.2% in Sydney trading.