New Zealand's a2 Milk tumbles on weak earnings forecast, profit miss
The a2 Milk Company reported a 44% decline in full-year profit driven by supply chain disruptions for its China-label infant milk formula. While the company continues to see revenue growth, supply chaos in the fourth quarter negatively impacted results. To offset these losses, the company issued a A$300 million special dividend. Looking ahead, a2 Milk forecasts revenue growth in the mid-single digit percentage range for the 2027 fiscal year, though shares have reacted poorly to this guidance.
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- ✓ a2 Milk full-year profit fell by 44%.
- ✓ Supply chain disruptions for China-label infant milk formula reduced profits.
- ✓ The company issued a A$300 million special dividend.
- ✓ a2 Milk projects revenue growth in the mid-single digit percentage range for FY27.
What changed
The company released FY2026 results showing a significant profit drop and provided a mid-single digit revenue growth outlook for FY27.
Live updates
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a2 Milk profit drops 44% amid China infant formula supply shortages
The a2 Milk Company reported a 44% decline in full-year profit driven by supply chain disruptions for its China-label infant milk formula. While the company continues to see revenue growth, supply chaos in the fourth quarter negatively impacted results. To offset these losses, the company issued a A$300 million special dividend. Looking ahead, a2 Milk forecasts revenue growth in the mid-single digit percentage range for the 2027 fiscal year, though shares have reacted poorly to this guidance.
Why it matters
The company relies heavily on the Chinese market for its premium infant formula sales. Supply chain stability in this region is critical for maintaining profit margins and growth momentum. This downturn highlights the vulnerability of the company's logistics and distribution network in Asia.
What is confirmed
- a2 Milk full-year profit fell by 44%.
- Supply chain disruptions for China-label infant milk formula reduced profits.
- The company issued a A$300 million special dividend.
- a2 Milk projects revenue growth in the mid-single digit percentage range for FY27.
Still unconfirmed
- ACOPF is 10.2% overvalued based on GF Value.
What to watch next
- Quarterly sales data for China-label formula to verify supply chain recovery.
- Investor response to the FY27 revenue guidance in subsequent trading sessions.
confidence 90%Sources used for this update (13)
- Reuters — New Zealand's a2 Milk full-year profit falls 44% on weaker China-label IMF sales
- GuruFocus — ACOPF Looks 10.2% Overvalued on GF Value™ Amid Dividend Sustaina
- Kalkine Media — Why Is A2 Milk (ASX:A2M) in Focus Before ASX Trade?
- TradingView — The A2 Milk Company Sees FY27 Outlook Of Mid-Single Digit Percent Revenue Growth
- Finimize — A2 Milk’s China-Label Formula Shortage Took A Bite Out Of Profit
- Stocks Down Under — a2 Milk (ASX:A2M) hits A$300m special dividend as China supply chaos torches Q4
- Seeking Alpha — A2 Milk profit tumbles 44% after China formula shortage (ACOPF:OTCMKTS)
- Kalkine Media — Can a2 Milk (ASX:A2M) Rebuild China Momentum After Supply Disruption?
- kalkine.com.au — The a2 Milk Company (ASX:A2M) FY2026 Results: Revenue Growth Continues as Supply Chain Disruption Weighs
- adelaidenow.com.au — NAB home applications down 15pc after May budget changes
- The Australian — Weak formula: A2 Milk shares hit by weak guidance
- NutraIngredients.com — a2MC’s FY26 revenue suffers from infant formula supply chain disruption
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