Oatly has cut its revenue expectations for the year due to a continued slowdown in the US and China.
While the company’s revenue grew in the second quarter to 30 June, this was primarily driven by favourable exchange rates.
Excluding this, sales fell 0.2% to $201.7m compared to the same period last year.
Oatly said the drop was primarily due to a decline in North America and China, partially offset by strong growth in Europe and other markets.
As a result, it now expects constant currency revenue growth to be flat to 1% for the full year, compared to a prior expectation of 2% to 4%.
“Our updated guidance reflects slower-than-expected top-line progress in our North America segment, as well as a soft macro-environment in our Greater China business,” said Jean-Christophe Flatin, Oatly’s CEO.
Oatly has undergone a sizeable turnaround since Flatin took over as CEO in 2023, and is edging ever closer to profitability.
Flatin sought to highlight the company’s focus on cost efficiencies and overhead structure that has helped it trim losses to $3.6m from $11m in the same period a year ago.
The company’s share price fell 5% following today’s Q2 announcement.
In its Europe and international business, revenue was up 12% to $118.2m in the quarter, driven by both a currency tailwind and a boost in sales. Volumes rose 9.4% in the quarter, primarily driven by Barista products, outweighing an average price cut of 3.7%.
Oatly has initiated a strategic review of its Greater China business “with the goal of accelerating the growth and maximising the value of the business”.
The group’s revenue in the region fell 6.4% to $27m during the second quarter.
In February, it ended the construction of its second manufacturing facility in China, not long after the closure of its Singapore factory at the end of last year.
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