The A2 Milk Company Ltd (ASX: A2M) share price is down 2% after the company announced its FY26 result.
A2 Milk is one of the largest infant formula producers in the Asia Pacific region. It also sells liquid milk in ANZ and the US.
FY26 result
Here are some of the highlights from the 12 months to 30 June 2026:
- Revenue increased 12.4% to $1.98 billion
- Underlying EBITDA (EBITDA explained) fell 2.5% to $284.4 million
- Underlying net profit rose 7% to $235.8 million
- Statutory net profit fell 5.8% to $207.5 million
- Ordinary dividend per share increased 5% to $0.21
- Special dividend per share of $0.41355
What happened in this result?
A2 Milk reported that its growth was driven by English label infant milk formula, other nutritionals and liquid milk.
Revenue growth was partially offset by a reduction in Chinese label infant formula sales driven by supply chain disruption in the fourth quarter of FY26 – the negative factors have now been resolved and product availability significantly improved.
The overall China infant formula market value grew by 0.7% in FY26, as ‘premiumisation’ offset low single-digit volume declines. The 2025 calendar year newborns of 7.9 million were down 17% year on year following boosted births from the Dragon Year and deferred COVID births.
The 2026 newborns are expected to be supported by a recovery in marriage rates seen in 2025 and a greater focus on the birth rate by the government.
A2 Milk’s China and other Asian revenue rose 11.2% to $1.45 billion, driven by infant formula sales growth of 5.6% and other nutritional sales growth of 71% (with new products such as seniors and junior fortified milk powder products). However, margins were impacted by the FY26 supply chain disruption.
ANZ revenue grew 10.2% to $348.2 million thanks to 17.2% growth in the Australian liquid milk business to $244.9 million. English-labelled infant formula sales declined 8.6% because of lower Daigou sales.
In the USA, revenue grew 28.6% to $179 million, with an improved EBITDA loss of $3.4 million (compared to $9.3 million in FY25). This division achieved breakeven in the second half of FY26.
Outlook for the A2 Milk share price
The company expects revenue and EBITDA to grow in FY27, supported by an increased contribution from product innovation and new markets, continued momentum in other nutritionals and liquid milk, and profitability improvement for a2 Pokeno.
Infant formula sales are expected to be impacted by the flow-on effects of supply chain disruption in the fourth quarter of FY26. Infant formula sales are expected to be similar in FY27 compared to FY26, with Chinese-labelled products gradually recovering over the course of FY27.
The company is expecting stronger revenue and EBITDA in the second half of FY27 compared to the first half.
FY27 revenue is expected to grow by mid-single-digits, with flat growth in the first half of FY26. The EBITDA margin is expected to be 15% in FY27, with the first half to be “materially down”.
It will provide an update on its infant milk formula recovery plan at the annual general meeting (AGM) on 19 November 2026.
A2 Milk is an impressive business, but it’s reliant on Chinese demand, so I’m not sure how reliable its earnings are. However, I’m impressed by its ongoing progress with liquid milk in Australia and the US.
It’s a volatile stock, so it’s not one of the ASX growth shares I’m looking to invest in right now.
