New Zealand’s A2 Milk on Thursday upgraded its full-year earnings forecast, citing stronger-than-expected trading across its core product categories and a weaker New Zealand dollar, but failed to woo investors with shares hitting a near one-month low.
The Auckland-headquartered firm said trading in infant milk formula, or IMF, its top market, was stronger than expected, with English-label IMF revenue growth forecast to outpace China-label IMF growth.
The company, which also sells fresh milk, said movements in actual and forecast currency rates, reflecting a weaker New Zealand dollar, are expected to inflate reported sales and expenses.
Shares of the company pared some of its early losses to trade 0.8 per cent down as of 0001 GMT. The stock fell as much as 4.7 per cent, hitting its lowest level since October 28 in early trade.
“Moving from high single-digit to low double-digit growth is not cosmetic,” said Jeremy Sullivan, investment adviser at Hamilton Hindin Greene.
Tom McBride, founder and financial adviser at McBride Wealth, said the stock movement “could be a case of investors expecting higher earnings growth, or it may be a reaction to the increase in capital expenditure.”
IMF is the company’s top product category, primarily targeting babies and toddlers, and contributed 67 per cent of total sales revenue in fiscal 2025, according to its annual report.
The dairy company now expects low-double-digit revenue growth from continuing operations in fiscal 2026, higher than its previous forecast of high-single-digit growth, and anticipates slightly higher net profit after tax than last year.
Earlier in August, the company announced its fiscal 2025 results and logged a group revenue from continuing operations of NZ$1.76 billion (US$984.02 million), while it recorded a 21 per cent jump in its NPAT to NZ$202.9 million.
Trading was also stronger in its other nutritionals and liquid milk product segments, A2 Milk added.
Its nutritional portfolio comprises non-IMF powdered A2 Milk products, as well as China and other Asia liquid milk products.
The company also expanded the portfolio in the second half of 2025 with the launch of new kids fortified milk powder product, a move that has been received well by the consumers, as per A2’s annual report.
- Reporting by Rajasik Mukherjee in Bengaluru; Editing by Alan Barona, of Reuters.
