The A2 Milk Company Ltd (ASX: A2M) share price is in focus after the dairy product business announced its FY26 half-year result.
A2 Milk is one of the world’s larger infant formula and liquid milk businesses, with operations in ANZ, Asia and North America.
FY26 half-year result
Here are some of the highlights from its continuing operations for the six months to 31 December 2025:
- Revenue grew 18.8% to $993.5 million
- Underlying EBITDA (EBITDA explained) rose 25.9% to $164.9 million
- EBITDA increased 18.4% to $155 million
- Underlying net profit rose 19.6% to $122.6 million
- Net profit grew 9.4% to $112.1 million
- Interim dividend per share hiked by 35.3% to NZ$0.115
What happened in this result?
The company’s sales were strong across all of its segments.
Geographically, China and other Asian markets grew sales by 20.3%, ANZ saw revenue growth of 8.8% and the USA segment increased sales by 29.1%.
Looking at the different products, infant milk formula (IMF) sales rose 13.6%, with English label revenue up 20.9% and Chinese label revenue grew 6.5%.
Liquid milk sales in ANZ and USA rose 11.9% and 29.3%, respectively.
The company’s other nutritionals sales increased by 69% (or 42.9% excluding a2 Pokeno).
A2 Milk highlighted that the overall Chinese IMF market grew by 3.6% in the first half of FY26, supported by higher 2024 births, resulting in stage 1 volumes growing by mid-single-digit rates. Total market stage 2 volumes grew at double-digits, while stage 3 stabilised.
However, 2025 newborns were 7.92 million, a decline of 17%. 2026 newborns are expected to be supported by a recovery in marriage rates seen in 2025 and a greater focus on birth rate stabilisation which is “explicitly listed as a Chinese govern priority in 2026.”
A2 Milk’s Chinese label infant formula market share increased 0.1 percentage points (10 basis points) to 5.6% compared to FY25. It pointed to “strong execution performance across online and offline channels leading to record market share in both channels”.
Supply chain transformation
In August, the company announced the acquisition of a “world-class fully integrated nutritional manufacturing facility in Pokeno”, with two existing China label product registrations.
It also announced the divestment of Mataura Valley Milk (MVM) to optimise its asset footprint, capacity utilisation and financial performance.
It bought a2 Pokeno for $275 million and sold MVM for $11 million.
The company also entered into a long-term agreement with Fonterra for the supply of A1 protein-free milk from the North Island in New Zealand.
Outlook for the A2 Milk share price
A2 Milk said that it continues to perform well with revenue “trending ahead of previous expectations across all segments and products”.
As a result, the company has increased its guidance for FY26.
Revenue is now expecting mid-double-digit growth compared to FY25’s continuing operations. The EBITDA margin is expected to be between 15.5% to 16%.
The FY26 net profit after tax (NPAT) is expected to be “up” on the FY25 reported figure.
A2 Milk is clearly doing well at excelling during sometimes difficult conditions with a challenging trend for birth rates.
I’m not sure how high A2 Milk’s market share can go in China, so I’m not sure if it’s a good buy today considering it is up around double from the end of 2023 – investors are no longer super-pessimistic with the A2 Milk share price.
There are other ASX growth shares I’d focus on first.
