NZ's a2 Milk says China-IMF supply issues ease, sees higher annual profit (updated)

The a2 Milk

06/07/2026 22:48

China-label IMF sales down 14%
Sees FY26 profit slightly above FY25
Shares hit more than 3-month peak
recasts paragraph 1, adds share moves in 2, context in 4-6

    July 7 (Reuters) - New Zealand's a2 Milk ATM.NZ said on Tuesday it had largely resolved supply issues that hit its key China-label infant milk formula (IMF) product and raised its annual profit outlook, sending its shares to a near three-month high.
The company's stock gained 2.9% to hit NZ$9.62 in early trade, its highest level since mid-April. The broader NZX 50 index .NZ50 was up 0.3%.    
The dairy giant said in April that in-market supply of China-label IMF had been hit by low inventory levels, strong demand and higher freight costs due to the conflict in the Middle East.

         A2 Milk said these factors materially affected the availability of its core product in the fourth quarter of the financial year, prompting a large proportion of existing users to switch to alternative brands, with some customers switching to the company's English-label products.
  

    Sales of China-label IMF in fiscal 2026 have declined by around 14% on a preliminary basis from a year earlier.
  

    A2 Milk said it was now focused on sales and marketing initiatives to encourage previous China-label IMF users to return to the product, while accelerating new user recruitment with its retail and distribution partners.
  
The Auckland, New Zealand-based company said it now expects net profit after tax for fiscal 2026 to be slightly higher than last year's NZ$202.9 million ($115.63 million), compared with its earlier outlook for similar or lower earnings.

    A2 Milk added that its other product categories, including English-label IMF and Liquid Milk, have performed strongly, with sales significantly up compared with the last financial year.
  

    The company also expects annual revenue of NZ$1.97 billion, up 12% from a year earlier and compared with a previous forecast of low- to mid-double-digit revenue growth.  
  

($1 = 1.7547 New Zealand dollars)

 (Reporting by Nikita Maria Jino in Bengaluru; Editing by Maju Samuel and Tasim Zahid)
 ((Nikita.Jino@thomsonreuters.com;))