By Sam Boughedda
Oatly (NASDAQ:OTLY) posted a narrower-than-expected loss and topped second-quarter revenue expectations when it reported Tuesday.
The Swedish company that produces alternatives to dairy products from oats posted a second-quarter loss per share of $0.12, $0.01 better than the analyst estimate of a $0.13 loss per share. Revenue for the quarter came in at $177.9 million versus the consensus estimate of $183.49 million and 21.8% above revenue in Q2 2021.
The company faced headwinds, including China Covid-related lockdowns and foreign exchange-related challenges during the quarter.
"We delivered strong second quarter financial results with sales growth of 22%, or 30% in constant currency, despite several headwinds including COVID-19 lockdowns in China. Profitability metrics improved compared to the first quarter of 2022 and we expect this trend to continue in the second half of the year," said Toni Petersson, Oatly's CEO.
Oatly lowered its full-year guidance. The company said they believe macroeconomic uncertainty has impacted the speed at which it is able to expand its distribution footprint in food service and new markets, and the pace at which it has been able to convert new consumers from dairy to plant-based milk is taking longer than it had hoped. Oatly expects this to continue for the remainder of the year.
The company sees full-year 2022 revenue of between $800 million and $830 million.
Reacting to the report, a Cowen analyst reiterated an Outperform rating and an $8 per share price target on the stock.
"OTLY 2Q22A were once again mixed (EBITDA beat, revenue missed); FY22 top-line and cap ex guide were lowered. Europe retail and China foodservice exposure are suboptimal today; however, we're encouraged by Q/Q gross margin progress, which likely would have been even stronger had production volume been in line. Stock should remain range bound NT, though we remain constructive on the LT opportunity," said the analyst.
Oatly shares tumbled more than 17% Tuesday.