The A2 Milk Company Ltd (ASX: A2M) share price is on watch after the company upgraded its FY26 revenue guidance, now expecting low double-digit revenue growth and a stable EBITDA margin.
Image source: Getty Images
What did The A2 Milk Company report?
- FY26 revenue growth guidance has been raised to low double-digit percent versus FY25 (previously high single-digit).
- 1H26 revenue growth expected to outpace 2H26, with stronger English label IMF performance.
- EBITDA margin expected between 15% and 16%.
- NPAT anticipated to be slightly up on FY25's reported $203 million.
- Cash conversion forecast at 80% to 90%.
- Capital expenditure projected at $60 to $80 million.
What else do investors need to know?
The company attributed its improved outlook to stronger than expected performance across Infant Milk Formula, Other Nutritionals, and Liquid Milk categories. Recent currency movements, particularly NZD weakness, are expected to boost reported sales and expenses, although the net effect on EBITDA (after hedge losses) should be minimal.
Depreciation and amortisation are forecast at $20 to $24 million, while lower market interest rates will likely reduce interest income. Capital investment is set to support ongoing growth initiatives and operational efficiencies.
What's next for The A2 Milk Company?
Looking ahead, A2 Milk expects first-half FY26 revenue growth to be stronger than the second half, driven in part by robust English label IMF sales. The business will continue to focus on innovation and brand strength in key international markets, while carefully managing currency exposures and capital investments.
Ongoing operational discipline and targeted marketing are likely to remain priorities as the company seeks to build on its momentum and deliver steady growth for shareholders.
The A2 Milk Company share price snapshot
Over the past 12 months, A2 Milk shares have risen 90%, significantly outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 1% over the same period.
