New Zealand infant formula supplier a2 Milk expects only a gradual recovery from supply chain disruptions that impacted its China sales earlier this year. The company signaled that earnings margins will be soft in the six months through December.

The supply chain issues affected a2 Milk's performance in the China market, which represents a significant portion of its revenue. Management indicated that rebuilding inventory levels and restoring normal distribution channels will take time.

Analysts noted that the company's recovery trajectory remains uncertain, with consumer demand patterns in China continuing to evolve. The broader infant formula market in China has faced regulatory changes and increased competition.

a2 Milk did not provide specific financial forecasts but emphasized its commitment to long-term growth in the Chinese market. The company plans to focus on operational improvements and customer service enhancements to support its recovery efforts.