The milk sours for A2M
A2 Milk (A2M) -11.42%
Shares hit today as the company talked down sales for the first half on the back of weaker daigou demand. Daigou sales are “a significant portion of infant formula sale in Australia & New Zealand” where local buyers export stock to China. While it hard to put a figure on daigou sales, A2 Milk is confident that demand for its products in China remains strong and the issue is logistical given direct sales continue to perform well.
At the full year result, A2 Milk flagged a weak first half on concerns pantry de-stocking would see lower demand and as a result, they did not provide guidance. The company now expects revenue of $NZ 1.8-$NZ 1.9b with EBITDA margins of 31%, a 10% miss at both the revenue and EBITDA lines.
A2 Milk (A2M) Chart
