a2 Milk Shares Rise Nearly 4% as Investors Return to Beaten-Down Infant Formula Maker After Tough Year
The dairy company's stock gained during a volatile market session, offering some relief after a steep decline over the past year.
SYDNEY — Shares of The a2 Milk Company rose nearly 4% on Thursday, as investors returned to the beaten-down infant formula and dairy company during a session when defensive consumer stocks outperformed.
a2 Milk shares closed up 24 Australian cents, or 3.65%, at 6.82 dollars on the Australian Securities Exchange, finishing at the session high. The stock traded as low as 6.50 dollars earlier in the day, with volume of about 1.9 million shares.
The company, which is cross-listed in Australia and New Zealand, has a market value of about 5 billion Australian dollars.
No company news
a2 Milk did not release any significant company-specific news on Thursday. The gain came as investors sought out consumer staples companies during a volatile day for global markets, with South Korean chip stocks collapsing and technology shares under pressure worldwide.
Defensive stocks such as food producers often attract buying during periods of market turmoil because demand for their products tends to remain stable regardless of economic conditions.
Other consumer staples companies also rallied, with supermarket operator Woolworths rising more than 4% to a five-year high.
A difficult year
Thursday's gain offers some relief for shareholders after a tough year. a2 Milk shares are down about 26% since the start of 2026 and have fallen about 27% over the past year.
The stock has traded between 4.88 and 9.97 dollars over the past 52 weeks, reflecting significant volatility.
Strong balance sheet
Despite the share price decline, a2 Milk has a strong financial position. The company has net cash of about 903 million dollars, giving it flexibility to invest in growth or return money to shareholders.
Its latest reported gross margin was 45.8%. The company paid its first-ever dividend to shareholders in April 2025 and now pays dividends twice a year.
Reliance on China
Founded in New Zealand in 2000, a2 Milk sells milk and infant formula that contain only the A2 type of beta-casein protein, which the company markets as easier to digest than regular milk.
The company relies heavily on sales of infant formula in China, which has made it vulnerable to shifts in Chinese demand, competition from local brands and changes in regulation. Falling birth rates in China have also weighed on the infant formula market.
The company, led by CEO David Bortolussi, has been working to strengthen its supply chain and expand its presence in China through local manufacturing and new product registrations.
Investors will be watching for any trading update at the company's upcoming annual shareholder meeting, as well as signs of improving sales in China.
The company's shares remain well below their highs, and analysts say a sustained recovery will likely depend on evidence of renewed growth in its key markets.