Bubs share price lifts as the brand readies for debut on 4,000 US shelves

Excited baby making a surprised happy faceExcited baby making a surprised happy face

The Bubs Australia Ltd (ASX: BUB) share price is in the green on the final day of trade this week.

Building on what has already been a monumental month for Bubs, shares in the infant formula company are trading 3.36% higher to 62 cents. Although, the share price reached 64 cents moments after the morning bell. The gain means the Bubs share price is now up by more than 60% over the past month.

In comparison, the S&P/ASX 200 Index (ASX: XJO) is down 0.75%, taking it below 7,000 points once again.

What’s sending the Bubs share price higher?

As my colleague James covered late last month, a deal with the United States government for 1.25 million tins of baby formula gave the Bubs share price a considerable growth spurt.

Today brings another helping of positive news with the latest development regarding the US deal.

According to the release, the Aussie company has secured supply agreements with two major US retailers. This news has been received well by the market, with the Bubs share price rallying this morning.

In a major expansion for the brand, Bubs will be sold through Kroger Co and Albertsons Companies. As a result, the company’s products will have a presence in more than 4,000 stores across 35 states.

Commenting on the news, Bubs founder and CEO Kristy Carr said:

It is certainly a milestone achievement of which Bubs Family can all be proud. We have been working around the clock to ensure we get these critical supplies of infant formula to retail shelves in the USA. I thank all our team in Australia and the USA, our freight and logistics partners, and the U.S. and Australian Government officials, who have all collaborated to bring this much-needed relief to American families.

Additionally, it is expected that six lines of various formula products will hit shelves from 20 June 2022. For shareholders, this means the Bubs brand will take a prominent position in nearly all of Kroger’s retail banners — visited by around 11 million customers per day.

Furthermore, Albertsons Companies is recognised as one of the largest food and drug retailers in the US. Supplying Albertsons will give Bubs a spot on the shelves of around 2,200 stores. Albertsons’ brands include names such as Safeway, Vons, and Randall’s.

What else?

Importantly, Carr noted the demand from the US was not impacting its ability to fulfil other markets. This includes local Australian orders. This was a point stressed by the CEO upon the announcement of the US deal.

The Bubs share price is well outperforming the benchmark index so far this year, thanks to the US boost. Shares are now up 29% year-to-date, compared to the negative 8.4% netted by the broader market.

The post Bubs share price lifts as the brand readies for debut on 4,000 US shelves appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler 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.

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