Last week on the 'recovery story' thread, I posted some positive news re: BUBs turnaround in China sales which seems to line up with the results reported today. They performed well in the 11/11 sales festival which seems to have contributed to the stronger result. There's still more potential for growth in China than USA in my view. China sales could easily overtake USA - by the end of this FY even. It's simply a matter of how much they prioritise it.
Even with the issues they were having with Amazon and the inventory transition, it seems like there is a bit of a natural limit to what they can do in USA. They have continued to increase the number of tins sold yet the sales revenue has plateued over the past 3 quarters. It's not clear whether the brick-and-mortar sales growth is due to within-store sales growth (i.e. repeat sales) or just from expanding store distribution.
EBITDA breakeven seems to be dependent on the timing of inventory production i.e. they manufactured new inventory in the previous quarter and sold it this quarter without manufacturing as much new product. Which would explain why it is projected to be back down again next quarter. Hopefully they don't run out of inventory again because $12M spent on product manufacturing this quarter is the lowest it has been for quite some time and much lower than PCP.
BUB Price at posting:
11.5¢ Sentiment: None Disclosure: Not Held
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