The a2 Milk Company Ltd (ASX: A2M share price is in focus today after the company reported preliminary FY26 results, featuring revenue up more than 12% to about $1.97 billion, even as China infant milk formula (IMF) sales declined due to supply chain disruptions.
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What did The a2 Milk Company report?
- FY26 revenue of approximately $1.97 billion, up over 12% year-over-year
- China label IMF sales down around 14% on FY25 after supply chain issues in 4Q26
- EBITDA margin expected at the high end of 14.0% to 14.5% guidance
- NPAT anticipated to be slightly up on FY25, with underlying NPAT also rising
- Cash conversion of about 70%, well above the previous 50% outlook
- Strong sales across other key categories, including English label IMF and liquid milk
What else do investors need to know?
The a2 Milk Company faced several challenges in the China IMF market during the fourth quarter, such as freight issues, production bottlenecks, and new customs requirements, which led to product shortages. Many customers had to temporarily switch to other brands, impacting in-market sales.
Since then, these supply issues have largely been resolved, with stock levels now back in line and increased product flows across major channels. Management is prioritising marketing and sales efforts to win back previous customers and attract new ones in China.
What's next for The a2 Milk Company?
Investors can expect a further update when the company releases its audited FY26 results and FY27 outlook on 17 August 2026. Management says efforts will continue to recover China label market share while accelerating new user acquisition with retail and distribution partners, supported by stable supply chains.
The business is also focused on maintaining the growth seen in other product categories and driving operational improvements to support ongoing profitability. Investors will be watching for more detail on strategy and guidance next month.
The a2 Milk Company share price snapshot
Over the past 12 months, a2 Milk shares have declined 3%, trailing the S&P/ASX 200 Index (ASX: XJO), which has risen 3% over the same period.
