Still, the company expects to clinch a bigger share of the shrinking infant milk formula market, which comprises almost 70% of the company’s sales, in 2024, it said in its full-year earnings statement. A2 Milk shares fell as much as 12.3% in Wellington, the most in since May 2021, to the lowest in more than a year.
“Even if it [the Chinese market] does decline more in the future, then it will eventually stabilize,” he said. “It’s not going to continue to decline at the rates that it is at the moment. We still have an enormous market opportunity for us and share gain opportunity.” A2’s overall revenue in Asia grew 38%, as the value of China’s overall formula market declined around 14%, it said.
The company delivered a “solid operating result and appropriately caveated outlook statement,” Jarden analysts Nick Yeo and Adrian Allbon said in a research note. However, the downgrade for low single-digit revenue growth is likely to continue weighing on investor confidence, they said.
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