The a2 Milk CoASX:A2M +1.27%83 Gross Margin % is 48.92% as of Dec. 2025, which is 6% above its 10-year median of 46.27. GuruFocus rates ASX:A2M with a GF Score™ of 83/100 and a GF Value™ of A$6.67 (Fairly Valued). The stock has 3 warning signs investors should review. Among 1,901 Consumer Packaged Goods companies, The a2 Milk Co ranks better than 82.85% on this metric.
The a2 Milk Co Ltd gross margin has been in long-term decline. The average rate of decline per year is -2%.
The historical rank and industry rank for The a2 Milk Co's Gross Margin % or its related term are showing as below:
ASX:A2M'
s Gross Margin % Range Over the Past 10 Years
Min: 42.3 Med: 46.27 Max: 55.96
Current: 48.04
During the past 13 years, the highestGross Margin % of The a2 Milk Co was 55.96%. The lowest was 42.30%. And the median was 46.27%.
ASX:A2M's Gross Margin % is ranked better than 82.85% of 1901
companies
in the Consumer Packaged Goods industry
Industry Median: 26.37
vs ASX:A2M: 48.04
The a2 Milk Co had a gross margin of 48.92% for the quarter that ended in Dec. 2025 => Durable competitive advantage
The 5-Year average Growth Rate of Gross Margin for The a2 Milk Co was -2.00% per year.
The a2 Milk Co (ASX:A2M) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
The a2 Milk Co had a gross margin of 48.92% for the quarter that ended in Dec. 2025 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
The a2 Milk Co Gross Margin % Related Terms
The a2 Milk Co Gross Margin % Historical Data
* Premium members only.
The historical data trend for The a2 Milk Co's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Packaged Foods subindustry, The a2 Milk Co's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
The a2 Milk Co Gross Margin % vs Consumer Packaged Goods Industry
For the Consumer Packaged Goods industry and Consumer Defensive sector, The a2 Milk Co's Gross Margin % distribution charts can be found below:
* The bar in red indicates where The a2 Milk Co's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
The a2 Milk Co (ASX:A2M) has a Gross Margin % of 48.92% as of Dec. 2025. Gross margin is the ratio of total gross profit to net sales. View historical data on The a2 Milk Co and its competitors. This is near median its historical median of 46.27. Over the past decade, The a2 Milk Co's Gross Margin % has ranged from 42.30 to 55.96. According to the industry distribution chart, The a2 Milk Co ranks #326 out of 1901 companies in the Consumer Packaged Goods industry, placing it in the top 17.1%.
Is The a2 Milk Co's Gross Margin % too high?
The a2 Milk Co's current Gross Margin % of 48.92% is near median its 10-year median of 46.27. Over the past 10 years, this metric has ranged from a low of 42.30 to a high of 55.96. The Consumer Packaged Goods industry median Gross Margin % is 26.37. The a2 Milk Co's value of 48.92% is 85.5% above this industry median. Based on the distribution chart, The a2 Milk Co ranks #326 out of 1901 companies in the Consumer Packaged Goods industry, which is in the top quartile — a strong position relative to peers. Overall, The a2 Milk Co has a GF Score™ of 83/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does The a2 Milk Co's Gross Margin % compare to KHC and GIS?
According to the Consumer Packaged Goods industry distribution chart, The a2 Milk Co ranks #326 out of 1901 companies for Gross Margin %. This places The a2 Milk Co in the top 17% of its industry — outperforming the majority of peers. The industry median Gross Margin % is 26.37. The a2 Milk Co's value of 48.92% is 85.5% above this benchmark. Historically, The a2 Milk Co's own Gross Margin % has ranged from 42.30 to 55.96 over the past decade. While the company's 10-year median is 46.27 vs. the industry median of 26.37, The a2 Milk Co has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Consumer Packaged Goods company?
The median Gross Margin % among Consumer Packaged Goods companies is 26.37, based on 1,901 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. The a2 Milk Co's current Gross Margin % of 48.92% is 85.5% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on The a2 Milk Co and its competitors. For the Consumer Packaged Goods industry, the median Gross Margin % is 26.37 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. The a2 Milk Co's current Gross Margin % is 48.92%, which is near median its own 10-year median of 46.27. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is The a2 Milk Co stock overvalued right now?
Based on GuruFocus' analysis, The a2 Milk Co (ASX:A2M) is currently considered Fairly Valued. The stock's GF Value™ is A$6.67, compared to a current price of A$7.19 — trading 7.8% above its estimated fair value. The current Gross Margin % is 48.92%, which is near median its 10-year median of 46.27 and 85.5% above the Consumer Packaged Goods industry median of 26.37. The a2 Milk Co's overall GF Score™ is 83/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For The a2 Milk Co (ASX:A2M), the current Gross Margin % is 48.92% as of Dec. 2025. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is The a2 Milk Co (ASX:A2M) Overvalued in 2026?
Based on GuruFocus' analysis, The a2 Milk Co stock appears to be overvalued.
The current stock price of A$7.19 is trading 7.8% above its estimated GF Value™ of A$6.67.
GuruFocus considers The a2 Milk Co to be Fairly Valued.
Key valuation signals for ASX:A2M:
Gross Margin %: 48.92% (near median its 10-year median of 46.27)
GF Value™: A$6.67 vs. price of A$7.19 (7.8% above fair value)
Industry Position: 85.5% above the Consumer Packaged Goods median (#326 of 1901)
No single metric tells the full story. See the ASX:A2M stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
A2 Milk is a New Zealand licensor and marketer of fresh milk, infant formula, and other dairy products that lack the A1 beta-casein protein. The firm was founded in 2000 by Corran McLachlan, who developed a genetic test to determine which proteins a cow produces in its milk, and business partner Howard Paterson. The company has been through a tumultuous history of receivership, legal battles, and strategic shifts, but emerged in its current structure in 2006 and listed publicly in March 2013.
83GF Score
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