Highlights
- The a2 Milk Company (ASX:A2M) gained 8.65% as the market assessed its FY26 result and recovery outlook.
- FY26 Revenue increased 12.4% to about NZD 1.97bn.
- Underlying full-year profit rose 7% to NZD 235.8mn.
- China-label infant formula revenue fell 14% after supply-chain disruption, while English-label sales grew.
The a2 Milk Company (ASX:A2M) has gained 8.65% as investors weigh a year of broad revenue growth against disruption in the company’s most important China-label infant formula channel. FY26 revenue increased to roughly NZD 1.97bn, while Underlying Profit rose, but shortages and freight pressures affected China-label sales late in the year. Management now expects a slower FY27 recovery, making supply-chain normalisation and customer win-back the central themes.
FY26 Revenue Continued to Grow
Group revenue rose 12.4% in FY26 to about NZD 1.97bn. China and other Asian markets remained the largest contributor, supported by growth in English-label infant formula and other nutrition products.
China-Label Supply Problems Hit Momentum
China-label infant formula revenue declined 14% to NZD 544.3mn after production backlogs, freight constraints and shortages affected product availability. The company has said stock levels have since improved.
Underlying Profit Still Moved Higher
Underlying full-year profit increased 7% to NZD 235.8mn. Statutory profit was affected by transaction and asset-related items, making the underlying result a clearer measure of operating performance.
FY27 Guidance Is More Conservative
A2 Milk expects mid-single-digit revenue growth in FY27 and an Earnings Margin of about 15%. Growth is expected to be weighted more heavily toward the second half as the China-label Business rebuilds.
What to Watch
China-label customer recovery, English-label momentum, supply-chain performance and execution at the Pokeno Manufacturing Facility are the main issues.
Risks
The company remains exposed to China infant-formula demand, regulatory conditions, manufacturing reliability, freight costs and competition.


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