The BUBs 3rd quarter report released today has probably not inspired the market with confidence for A2M.
BUBs China sales decreased 66% from last year, which they blamed on COVID:
"While affected during the recent lockdowns and supply disruptions due to the increased COVID outbreaks inmajor cities, China remains the world’s largest market for infant formula and within that, the super-premiumsegment to which Bubs belongs. Following the change of China’s COVID policy and border reopening, we expectthe growth rate in China to accelerate in the second half."
Interestingly, during the Shanghai lockdowns of last year (around May 2022 if I recall correctly) A2M fared quite well despite market speculation that it would produce a downgrade to FY22 results. Those results ended up exceeding expectations. Will be interesting to see if A2M bucks the trend again. My guess is BUB are using 'COVID' as something of a scapegoat for lackluster market share/penetration in general.
A2M Price at posting:
$6.81 Sentiment: Buy Disclosure: Held
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