The a2 Milk Company (a2MC) reports the supply chain problems that stripped roughly 14 per cent from its China label infant formula sales this year have been substantially resolved, with preliminary FY26 results in line with or slightly ahead of guidance.
The a2 Milk Company says the supply chain disruptions that materially impacted its China label infant milk formula (IMF) business in the fourth quarter have been substantially resolved, with stock levels back at target and preliminary FY26 results expected to land in line with, or slightly ahead of, the guidance it issued in April.
China label IMF sales for FY26 are down approximately 14 per cent on FY25 as a result of the disruption. All other product categories, including English label IMF, Other Nutritionals and Liquid Milk, performed strongly and are significantly up on FY25.
The company first flagged the problem in a trading and supply chain update on 13 April, warning shortfalls of China label product at distributors and retailers would materially impact in-market availability during 4Q26. It attributed the shortfalls to strong demand in the preceding quarter, freight challenges, a production backlog at Synlait, extended product release times, and additional customs clearance requirements and testing measures.
The company confirmed the availability squeeze forced a large proportion of existing China label users to switch to alternative brands, with some moving to its English label products. The impact on English label product was limited and largely concentrated on a2 Genesis, which was affected by planned production downtime at a2 Pokeno and a change in China importation requirements.
“The contributing factors to the product availability issues have now substantially been resolved, and product flows to distributors and retailers have materially improved across China label and English label products with stock levels returning to target levels,” the company said.
Its focus is now on sales and marketing initiatives to win back previous China label users while accelerating new user recruitment with retail and distribution partners.
FY26 in line or slightly ahead
Based on preliminary unaudited results, which remain subject to finalisation and external audit, a2MC expects revenue of approximately NZ$1.97 billion, up more than 12 per cent on FY25. April guidance was for low to mid double-digit growth.
The company will release its audited FY26 results and FY27 outlook commentary on 17 August.
