New Zealand’s a2 Milk posts 44% fall in full-year profit

New Zealand's dairy company a2 Milk reported a significant 44% drop in its full-year profit for the year ending June 30, 2026, due to supply-chain issues in its China-label business. The company's shares plummeted more than 10% following the news, hitting their lowest point since mid-June. The disruption in China's infant milk formula (IMF) sales, which decreased by 14% to NZ$544.3 million, forced customers to switch to alternative brands.

While stock levels have since improved, a2 Milk expects the impact of the supply-chain disruption to persist into fiscal 2027, with revenue growth projected to be in the mid-single-digit percent range, down from 12.4% in 2026. Despite the setbacks, the company anticipates earnings margin to be around 15%, a significant decline from the six-month period through December 2026.

Analysts from Citi noted that the recovery from the supply-chain issue is expected to be slower than initially anticipated, resulting in a revenue growth guidance that may be underwhelming given the company's current stock valuation.