New Zealand shares dropped, led lower by Kathmandu Holdings and Fisher & Paykel Healthcare following trading updates, while A2 Milk met investor hopes at its annual meeting.

The S&P/NZX 50 Index fell 1.32 points, or 0.01 per cent, to 8088.48. Within the index, 25 stocks fell, 19 rose and six were unchanged. Turnover was $182.7 million.

Kathmandu Holdings led the index lower, down 4.6 per cent to $2.48. The outdoor equipment retailer, set to hold its annual meeting on Friday, said its first-quarter earnings were up despite sales dipping as it widened margins by selling less sale stock.

In the 16 weeks to November 19, group sales rose 0.6 per cent at constant exchange rates. In Australia, its largest market, same-store sales grew 2.9 per cent in the quarter while they dropped 10 per cent in New Zealand. Gross margin expanded 240 basis points, or 2.4 percentage points, with the level of clearance stock about 40 per cent lower than a year earlier, it said.

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"Sales for the first 16 weeks were positive in Australia but really negative in New Zealand, and I think the market may have just grabbed onto that figure and thought it's quite a significant pullback," said Peter McIntyre, investment adviser at Craigs Investment Partners.

Fisher & Paykel Healthcare dropped 4.5 per cent to $13.25. New Zealand's biggest listed company increased first-half profit 4 per cent to $81.3m, widened its margins, and lifted its forecast for full-year earnings to the top end of its range.

The latest earnings included $12.2m of patent litigation costs over disputes with rival Resmed compared with $2.4m of costs a year earlier, and excluding those, profit would have risen 13 per cent, it said. First-half revenue lifted 8 per cent to $458.4m. The company had forecast first-half revenue of about $460m and profit of about $80m.

A2 Milk Co was the best performer, up 5.4 per cent to $8.26. The milk marketer said both revenue and net profit jumped in the first four months of the current financial year as it continues to benefit from strong demand for its infant formula.

Revenue climbed 69 per cent to $262.2m in the four months ended October 30 from the same four months a year earlier, while net profit more than doubled to $52.3m, the company told shareholders at its annual meeting in Auckland.

Restaurant Brands rose 2.7 per cent to $6.82 and Metro Performance Glass advanced 2.2 per cent to 94c.

Arvida Group gained 0.9 per cent to $1.18. The retirement village company reported a decline in first-half profit on lower valuation gains and higher employee costs after a pay equity deal.

Net profit fell to $14.5m in the six months ended September 30 from $19.4m a year earlier. The result included an $8.9m valuation gain on its investment properties from a $14.3m gain a year earlier as the property market shows signs of slowing after several years of solid growth.

"Demand occupancy is quite high, it is a reasonable result particularly if you look at the underlying earnings," McIntyre said.

Argosy Property was unchanged at $1.045. It posted a 58 per cent decline in first-half profit as the firm became the latest listed property investor to report a little-changed portfolio valuation after several years of gains, and was faced with smaller rental income.