(Reuters) -New Zealand’s a2 Milk on Thursday raised its full-year earnings forecast, citing stronger-than-expected trading in its infant milk formula, or IMF, along with a weaker New Zealand dollar that is expected to boost its top line.
The Auckland-headquartered firm said trading in IMF, its top market, was stronger than expected, with English-label IMF revenue growth forecast to outpace China-label IMF growth.
IMF is the company’s core product category, primarily targeting babies and toddlers, and contributed 67% of total sales revenue in fiscal 2025, according to its annual report.
The dairy company now expects low-double-digit revenue growth from continuing operations in fiscal 2026, higher than its previous forecast of high-single-digit growth, and anticipates slightly higher net profit after tax than last year.
Earlier in August, the company announced its fiscal 2025 results and logged a group revenue from continuing operations of NZ$1.76 billion ($984.02 million), while it recorded a 21% jump in its NPAT to NZ$202.9 million.
Trading was also stronger in its other nutritionals and liquid milk product segments, a2 Milk added.
Its nutritionals portfolio also comprises non-IMF powdered a2 Milk products, as well as China & other Asia liquid milk products.
The company said movements in actual and forecast currency rates would inflate revenue and expenses, but the net impact on EBITDA, after hedge losses, was not expected to be material.
It also expects to spend in the range of NZ$60 million to NZ$80 million for fiscal 2026, higher than what it had flagged in August.
The firm said in August that it would buy a nutritional manufacturing facility in New Zealand from a unit of China Mengniu Dairy for NZ$282 million, a move aimed at boosting the company’s presence in its top market, China.
($1 = 1.7886 New Zealand dollars)
(Reporting by Rajasik Mukherjee; Editing by Alan Barona)
