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A2 Milk share price smashed, company appoints new CPO

The infant formula company's stock finished out Monday's session down 5.60%.

A2 Milk share price smashed, company appoints new CPO Source: Bloomberg

A2 Milk share price remains in a downtrend

It’s been a tricky time for a2 Milk (ASX: A2M), the once high flying infant formula company and market darling.

That status was built on years of heady share price gains and earnings upgrades: the stock could seemingly do no wrong in the eyes of the market, for a long time.

Covid came, the daigou channel faced serious disruption and a2 Milk’s status as a market darling has all but crumbled. A series of downgrades saw the stock fall and the outlook over the mid-term remains uncertain. When is it that things will normalise?

On one key point, the stock has become cheap – relatively speaking, to its historic levels. To give you some idea of the gravity of the recent pull-back, way back in August 2019 we wrote:

‘a2 Milk has seen its valuation contract somewhat following the release of its full-year results – the company continues to trade ahead of the broader market – commanding a price-to-earnings ratio (PE) of 35.8, when compared to the ASX 200’s PE ratio of 19.05.’

Those results – in retrospect – would be the start of a broader slide in the stock. Its valuation would also continue to contract, with A2M last trading at 16.5x earnings, on a trailing twelve months basis.

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A new look company

Despite volatility and uncertainty, the company has continued to try and shake things up, recently announcing a string of new executive hires.

On Monday, 26 July, the company announced it would be appointing Amanda Hart as its new Chief People & Culture Officer (CPO).

Hart most recently worked as the Head of Human Resources (Australian and New Zealand) for Dyson Appliances, and has previous senior human resources experience in retail and electronics.

A2 Milk's CEO and MD, David Bortolussi commented on this move, saying:

'Amanda is a highly capable people and culture leader with extensive consumer industry experience with innovative brands. The skills and impact Amanda has demonstrated, and her alignment with our culture at A2MC make her an excellent candidate for the role.'

Mr Bortolussi went on to say that 'Amanda is passionate about leadership development and employee experience and I look forward to her joining the company.'

This builds on an earlier July ASX announcement where the company announced two new executive leadership team appointments.

Here it was revealed that Yohan Senaratne would be joining the company as Executive General Manager (international); and that Kevin Bush would also be taking up the role of Executive General Manager for the Australian and New Zealand Region. Both new roles would report directly into the CEO and MD.

A2M closed out Monday’s session down 5.60%.

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