Bubs share price jumps 10% on Walmart agreement

A little girl dressed as a pilot prepares to leap off the sofa and take flight.

A little girl dressed as a pilot prepares to leap off the sofa and take flight.

The Bubs Australia Ltd (ASX: BUB) share price is storming higher on Thursday.

In morning trade, the infant formula company’s shares are up 10% to 62.5 cents.

Why is the Bubs share price pushing higher?

Investors have been bidding the Bubs share price higher today after the company released yet another update on its US supply mission.

In case you’re unaware, Bubs recently signed a deal with the US government to supply over a million tins of infant formula to help the country through a supply crisis.

This was caused by a major infant formula manufacturer suspending production following an issue. Though, it is worth noting that this manufacturer is now back up and running, so supply levels should start to improve in the coming months.

What’s the latest?

This morning Bubs revealed that it has entered into an agreement with retail giant Walmart for a shipment of 85,000 tins comprising six Bubs Infant Formula products and two Aussie Bubs Toddler Formula products. These will be distributed to approximately 800 Walmart stores in the United States.

Though, it is worth noting that this is a one-off agreement for this shipment, so nothing has really changed.

The only additional potential positive will be if Bubs can form an ongoing bricks and mortar relationship with Walmart once the crisis is over. But time will tell if US consumers will still choose Bubs when supply returns to normal and their previous favourites are back in stock.

Nevertheless, Bubs’ founder and CEO, Kristy Carr, was delighted with the news. She said:

We are tremendously excited to be forging a relationship with Walmart, with all of Bubs Infant Formula and Toddler Formula products going on shelf in approximately 800 stores across America’s Central and Mid-West regions. This store distribution builds on our existing Walmart.com sales channel. More broadly, the addition of Walmart will increase our bricks and mortar exposure in the United States over the coming days and weeks to around 4,800 stores across 35 States.

The post Bubs share price jumps 10% on Walmart agreement appeared first on The Motley Fool Australia.

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