By Stephen Wright

WELLINGTON, New Zealand--Infant formula marketing company a2 Milk Ltd. lowered its annual earnings forecast for the fourth time since September as the pandemic continues to crush sales via Chinese surrogate shoppers.

The company also said the chief executive of its Asia-Pacific division, Peter Nathan, has resigned and it has started a review of its business, in particular its reliance on daigou--surrogate shopping--sales.

"The board recognises that the company needs to change its approach and is commencing a comprehensive process to review its growth strategy," it said.

A2 Milk's share price has slumped by nearly two thirds since August last year, wiping about 10 billion New Zealand dollars ($7.3 billion) from its market value. Before the slide, it was one of the largest companies by capitalization in New Zealand's share market despite its reliance on the opaque daigou trade for part of its sales.

A2 Milk forecast an underlying profit margin of 11% to 12% for its 2021 fiscal year, down from the 24%-26% it forecast at its third earnings downgrade on Feb. 25.

The substantial downgrade partly reflects an estimated NZ$80 million to NZ$90 million of new provisions against profits for excess inventory that will need to be written down in value.

A2 Milk said the amount of inventory in the daigou and reseller system was larger than it had anticipated earlier in its financial year when it laid plans for a recovery in daigou sales.

It expects full-year revenue of NZ$1.2 billion to NZ$1.3 billion, down from NZ$1.4 billion forecast in February.

The company had about NZ$775 million of cash at the end of 2020. It said Monday it is considering options for returning capital to shareholders, including a share buy back.

Write to Stephen Wright at stephen.wright@wsj.com

(END) Dow Jones Newswires

05-09-21 1806ET