Sharemarket darling A2 Milk has announced an expanded distribution deal across nine states of the United States, boosting outlet access almost 30% to 5000 retail stores.
In a market update yesterday, chief executive Geoffrey Babidge said expansion of the A2 Milk brand access was across the northeast US region, encompassing New York, New Jersey, Pennsylvania, Connecticut, Rhode Island, New Hampshire, Massachusetts, Vermont and Maine.
The distribution expansion would move from about 3600 stores to potentially 5000 retail stores this month. The target states are home to about 60million people.
''Sales velocities are now achieving sustainable levels in California, the southeast region and select natural retail chains, which supports the expansion into an additional region,'' Mr Babidge said in a statement.
Last August, A2 Milk reported a trebling of profit to more than $90million and its shares hit a record high of $5.57 at the time.
Following the announcement yesterday, A2 Milk shares traded up 4.5% to $8.36, up 235% on a year ago.
Mr Babidge described the US northeast as a ''significant'' area for the refrigerated milk category, which accounted for about 20% of the total milk category volumes in the US.
He said A2 Milk had been accepted for distribution by major retailers including Ahold, Shoprite, Safeway, H-Mart and Fairway Foods, which built on its growing presence in the natural retail channels, already established with Wholefoods, Sprouts and The Fresh Market.
He reiterated an advertising campaign in the northeast meant an increased marketing investment, with higher marketing expenses to be booked in second half 2018 trading.
A2 Milk's total revenue for its year to last June rose 48% to $439.3million, reported earnings before interest, tax, depreciation and amortisation were up 159% at $141.2million and after-tax profit was up 198% at $90.6million, from $30.4million the previous year.
Infant formula sales had risen from 61% of total sales to 72% and direct sales into China had surged 133% to $89million.