Here's why the A2 Milk (ASX:A2M) share price is down 42% so far in 2021

It's been a tough year for A2 Milk. We take a look at its major hurdle ahead of the company's earnings report.

| More on:
sad baby with bottle, infant formula price drop,

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The A2 Milk Company Ltd (ASX: A2M) share price has slid 43% since the start of 2021.

After opening the year at $11.65, its shares have since dropped to swap hands for $6.64 apiece.

Unsurprisingly, the milk and milk-based products producer's shares have performed significantly worse than the broader market.

In 2021, the S&P/ASX 200 Index (ASX: XJO) has gained 12.2%, while the All Ordinaries Index (ASX: XAO) has increased by 11.7%.

Let's take a look at what's been impacting the A2 Milk share price through 2021.

What's driving the A2 Milk share price down?

While the A2 Milk share price has been sliding, the company has remained relatively quiet. In fact, the market hasn't heard any news from it since May.  

However, A2 Milk's most recent announcement highlighted the company's struggles against the COVID-19 pandemic.

In May, A2 Milk reported it was changing tack on how it's addressing the fall of the daigou network and cross-border e-commerce channels that it once relied on. It also downgraded its guidance for financial year 2021 for the fourth time.

The A2 Milk share price crashed 13% on the back of the new plan. Unfortunately, the market seemingly hasn't changed its view on the company since.

Perhaps it was because A2 Milk was restating the same message it had been for many months prior. Without an international reseller network and Chinese demand for its infant formula products, the company's revenue had slowed significantly.

In May, A2 Milk downgraded its financial year 2021 guidance. It stated it expected to report revenue of between $1.15 billion and $1.2 billion (converted from New Zealand Dollars at the exchange rate of the time of writing).

For comparison, the company reported $1.65 billion in revenue for the 2019 financial year (once again, converted from New Zealand Dollars).

Whether A2 Milk's guidance came to fruition will be answered tomorrow. The company is expected to report its results for financial year 2021 on Thursday.

All eyes will be on the A2 Milk share price to see if the company's outlook for financial year 2022 is more optimistic.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the 'five best ASX stocks' for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Consumer Staples & Discretionary Shares

A warehouse worker is standing next to a shelf and using a digital tablet.
Consumer Staples & Discretionary Shares

Wesfarmers share price dips amid strategy day for investors

What's ahead for this diversified conglomerate?

Read more »

A man looks a little perplexed as he holds his hand to his head as if thinking about something as he stands in the aisle of a supermarket.
Consumer Staples & Discretionary Shares

Should I buy Woolworths shares today?

Woolworths shares have gained far less than Coles shares over the past year. Is that about to change?

Read more »

A woman sits at her home computer with baby on her lap, and the winning ticket in her hand.
Consumer Staples & Discretionary Shares

Which 'enduring high-quality business' has become a forgotten ASX 200 stock?

Fundie says this ASX 200 consumer discretionary stock has been flying under investors' radar.

Read more »

A young man sitting at an outside table uses a card to pay for his online shopping.
Consumer Staples & Discretionary Shares

Why is the Kogan share price crashing 12%?

Profits are down at this ecommerce company during the second half.

Read more »

A woman looks at a tablet device while in the aisles of a hardware style store amid stacked boxes on shelves representing Bunnings and the Wesfarmers share price
Consumer Staples & Discretionary Shares

Could Wesfarmers shares hit $100 in 2025?

Wesfarmers shares have risen 113% over the last five years.

Read more »

Interest rates written on top of pictures of houses on a computer.
Share Market News

3 ASX 200 consumer discretionary stocks to benefit from a rate cut

With an RBA rate cut expected this afternoon, it could be positive news for these three stocks. 

Read more »

Picture of a Domino's pizza.
Consumer Staples & Discretionary Shares

Domino's share price slides on major leadership shakeup

Domino’s announced a big leadership change this morning.

Read more »

Couple look at a bottle of wine while trying to decide what to buy.
Consumer Staples & Discretionary Shares

Treasury Wine shares: Buy, hold, or sell? Here's Macquarie's take

What is Macquarie forecasting for Treasury Wine shares amid the CEO’s unexpected exit?

Read more »