Geoff Babidge, managing director of A2 Milk. Photo / File
New Zealand shares fell, led lower by A2 Milk Co and Sky Network Television, while Kathmandu Holdings hit a four-and-a-half year high.
The S&P/NZX 50 Index dropped 15.92 points, or 0.2 per cent, to 8,985.47. Within the index, 22 stocks fell, 17 rose and 11 were unchanged. Turnover was $89.2
million.
A2 Milk was the worst performer, down 3.5 per cent to $11.36. It lifted annual sales 68 per cent, just beating the guidance given in May, and said it expects to maintain an earnings margin of about 30 per cent in the coming year even with increased spending.
"The trading update probably had a little bit for everyone, certainly at the top end of the range for expectations for 2018 though that had been slightly downgraded previously," said Matt Goodson, managing director at Salt Funds Management.
"The margins that they are guiding to are just a fraction below where the market is expecting, as they add more cost into the business in seeking to grow through mother-and-baby store chains in China which is a lot more cost-intensive than selling through daigou, and global liquid milk market in America.
