The Bubs Australia Ltd (ASX: BUB) share price is down 4.1% at the time of writing, having earlier posted losses of more than 5.5%.
Bubs shares closed yesterday trading for 61 cents and are currently trading for 58 cents.
This comes as investors are mulling over the infant formula companyâs full-year results for the 12 months ending 30 June (FY22).
What are ASX investors considering?
After posting gains for the last three trading days, the Bubs share price is heading in the other direction today.
Thatâs despite the company reporting record gross revenue of $104.2 million in FY22, up 123% from the prior year.
Investors may be questioning the long-term sustainability of that revenue increase, however. As The Motley Fool reported earlier today, gross revenue rocketed during the second half of the financial year, when the United States was running short of infant formula.
Bubs was able to partner with major US retailers to sell its formula in the US. This helped drive a 202% increase in the companyâs international sales from the prior year.
But with US formula producers returning to full production, investors may be pondering the uncertainty around future sales growth in that key market.
The Bubs share price also could be under some pressure as the company is still loss-making. Though, the loss after tax fell to $11.4 million in FY22, down from $74.7 million in FY21.
While management flagged earnings growth for FY23, without offering specifics, in an era of higher interest rates, future earnings come with a higher present cost. Hence ASX growth shares have more broadly come under pressure this year.
Bubs share price snapshot
The Bubs share price has been a strong outperformer in both the calendar year and over the past full year.
So far in 2022, Bubs shares are up 24%, compared to a 9% loss posted by the All Ordinaries Index (ASX: XAO). And over the past 12 months, the Bubs share price has leapt 43% higher, while the All Ordinaries has fallen 7%.
The post Why is the Bubs share price down 4% after reporting strong FY22 growth? appeared first on The Motley Fool Australia.
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Motley Fool contributor Bernd Struben 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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