WS Investor
13 Apr 2026, 09:47
a2 Milk Company reported strong demand for its infant milk formula products in China but warned that supply chain disruptions will weigh on its FY2026 performance.
The company highlighted robust sales momentum across both China-label and English-label products, supported by marketing initiatives and competitor product recalls. However, temporary supply constraints—driven by freight disruptions, production backlogs, stricter quality testing, and customs delays—are expected to impact product availability, particularly in April and May.
As a result, a2 Milk downgraded its outlook, now expecting lower infant formula sales, reduced EBITDA margins of around 14.0%–14.5%, and weaker cash conversion. Despite near-term challenges, the company plans continued investment to support long-term growth and supply chain improvements.
The company highlighted robust sales momentum across both China-label and English-label products, supported by marketing initiatives and competitor product recalls. However, temporary supply constraints—driven by freight disruptions, production backlogs, stricter quality testing, and customs delays—are expected to impact product availability, particularly in April and May.
As a result, a2 Milk downgraded its outlook, now expecting lower infant formula sales, reduced EBITDA margins of around 14.0%–14.5%, and weaker cash conversion. Despite near-term challenges, the company plans continued investment to support long-term growth and supply chain improvements.
