The a2 Milk Company Limited (ASX: A2M) released its FY26 results on 17 August 2026, reporting strong top-line expansion despite operational challenges late in the financial year. Group revenue rose 12.4% to NZ$1.97 billion, although supply-chain pressures affecting China-label infant milk formula (IMF) weighed on profitability. Reported EBITDA declined 2.5% to NZ$284.4 million, while underlying EBITDA increased 5.4% to NZ$307.6 million.Key Highlights

• Revenue jumped 12.4%, while underlying earnings remained resilient.
• China-label weakness was partly offset by strong English-label IMF growth.
• FY27 performance now depends heavily on China recovery and new products.

Broad-Based Sales Growth Supports FY26Revenue growth extended across the company’s major markets. China & Other Asia sales increased 11.2%, ANZ revenue advanced 10.2%, and the USA delivered a strong 28.6% increase.Product diversification also provided meaningful support. Total IMF sales grew 4.7%, driven by a 23.2% increase in English-label products. Liquid Milk sales climbed 21.8%, while Other Nutritionals increased 59.9%. Excluding external ingredient sales from a2 Pōkeno, Other Nutritionals still expanded 42.3%.

However, reported NPAT from continuing operations fell 5.8% to NZ$207.5 million, highlighting the earnings impact of supply constraints and higher operating costs.China IMF Recovery Takes Centre StageChina-label IMF revenue declined 14.0% during FY26 after product availability deteriorated in the fourth quarter. Freight constraints, production delays at Synlait, longer product-release periods and additional customs procedures contributed to the disruption.

Those issues have since been addressed, according to the company, with availability improving significantly. Management is now focused on attracting previous customers back while increasing new-user recruitment.

Two additional China-label IMF products are planned, broadening the portfolio and targeting opportunities in lower-tier cities and the organic segment.Innovation Strengthens Growth OptionsInnovation contributed more than half of FY26 revenue growth. The FY27 pipeline includes new China-label formulas, upgrades to a2 Platinum and a2 Genesis, expanded kids nutrition offerings and further portfolio development.

The a2 Pōkeno facility is also becoming central to the company’s manufacturing strategy as a2 Milk shifts more production internally and seeks greater supply-chain control.Outlook: Execution Will Drive the Next PhaseFor FY27, a2 Milk expects mid-single-digit revenue growth and an EBITDA margin of approximately 15%. IMF sales are anticipated to remain broadly similar to FY26 as China-label demand progressively recovers.

The outlook therefore rests heavily on execution. Improving China sales, successful product launches and stronger manufacturing control could support another period of growth, although the speed of the IMF recovery remains a key factor to watch.

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