New Zealand’s a2 Milk forecast weak annual earnings on Monday after missing market expectations for fiscal year 2026 due to supply-chain disruption in its China-label business, sending its shares plunging more than 10%, reports Reuters.
Strong third-quarter demand, production backlogs, and higher freight costs disrupted supply and caused shortages of China-label infant milk formula (IMF) in the June quarter, forcing existing users to switch to alternative brands, the Auckland-based dairy firm said.
As a result, revenue from China-label IMF sales declined 14% to NZ$544.3 million ($320.59 million) in the year ended June 30. Stock levels have since “significantly improved”, the company said, adding that it was working to win back lapsed customers and attract new ones.