a2 Milk Net Profit Drops 44% Amid China Supply Disruptions

The a2 Milk Company reported a 44% decline in full-year net profit to NZ$113.6 million for the year ending June 30, falling short of analyst estimates of NZ$121 million. The loss was primarily caused by supply chain disruptions that left China-label infant milk formula out of stock during the June quarter.

These shortages forced a large proportion of existing users to switch to alternative brands as they ran out of pantry stock. Consequently, revenue from China-label infant milk formula sales fell 14% to NZ$544.3 million, impacted by production backlogs and increased freight costs. The company noted that these issues "materially impacted in-market product availability during 4Q26".

Despite the net profit drop, the company saw an 11.2% increase in total revenue from China and other Asia, reaching NZ$1.45 billion, driven by strong sales of English-label products. Underlying profit also rose 7% to NZ$235.8 million. In response to the overall financial results, a2 Milk reduced its final dividend to 9.5 New Zealand cents per share from 11.5 cents the previous year. The company stated that stock levels have since improved and it is now focusing on regaining lost users.