The A2 Milk (ASX:A2M) share price has fallen 46% so far in 2021. Here's why

Here are the weights the A2 Milk share price didn't manage to shrug off in 2021.

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2021 has been a bad year for the A2 Milk Company Ltd (ASX: A2M) share price so far.

Its first close of the year saw it sitting at $11.65. As of today's close, the A2 Milk share price is $6.26. That represents a 46.26% fall.

The former market darling has only released price-sensitive news to the ASX 4 times since the start of this year.

Unfortunately for A2 Milk investors, each time the company has updated the market, its share price has fallen by more than 10%.

Let's take a look at what's been driving the milk and formula producer and supplier's share price downwards this year.

And a quick note: all dollar figures are converted from New Zealand dollars at today's exchange rate of AUD$1 to NZD$1.04.

a small girl sits with her hand holding up the side of her face as she looks down in a downcast manner as she drinks a glass of milk through a straw.

Image source: Getty Images

A2 Milk share price struggles through 2021

The first major hit to the A2 Milk share price in 2021 came on 25 February when the company released its results for the first half of financial year 2021.

Over the 6 months ended 31 December 2020, A2 Milk recorded $650.3 million of revenue. That represented a drop of 16% on that of the first half of the previous financial year.

On the same day, A2 Milk also downgraded its forecasted revenue for financial year 2021 to around $1.34 billion.

Perhaps unsurprisingly, A2 Milk's stock tumbled 13.9%.

The next time the company released price-sensitive news to the ASX was on 10 May.

Then, it downgraded its guidance again after its daigou and cross-border e-commerce markets failed to recover as planned. Its new guidance for financial year 2021 was for revenue of between roughly $1.15 billion and $1.2 billion.

When A2 Milk dropped its guidance, its share price fell 13.1%.

That guidance came to fruition on 26 August when the company announced its revenue for financial year 2021 was, indeed, around $1.16 billion – representing a 30% decline on that of the previous financial year.

A2 Milk's stock dropped another 11.8% that day.

And the final fall came nearly 3 weeks ago when A2 Milk announced its recovery plan but hesitated to promise it would get back to its previous profit levels.

As readers have likely guessed, the company's share price plummeted 11.9% on the back of the update.

All eyes will likely be on A2 Milk when it reports its results for the first half of financial year 2022 to see if its new plan puts it on the road to recovery.

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.

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