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Bubs Australia Ltd shares are down 14% in a week

The Bubs Australia Ltd (ASX: BUB) share price is on course to make it two consecutive days of declines.

In late afternoon trade the goats milk infant formula and baby food company’s shares are down 1.2% to 80.5 cents.

This means Bubs’ shares have lost 14% of their value in the space of a week.

What happened?

Investors appear to have been disappointed with the company’s half-year results which were released last week.

Unlike industry giant A2 Milk Company Ltd (ASX: A2M), Bubs’ results underwhelmed the market and appeared to leave some investors concerned that it would never live up to its lofty market capitalisation.

For the six months ended December 31, Bubs reported half-year gross sales growth of 92% on the prior corresponding period to $3.72 million. Approximately two-thirds of these sales were derived from its infant formula business.

Things were not as pretty on the bottom line, though.

For the first-half Bubs recorded a loss greater than its sales at $3.85 million. In addition to this, operating cash flows were negative for the half at -$5.6 million.

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Motley Fool contributor Motley Fool Staff has no position in any stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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