Oatly shares have slumped to a new low as losses widened further and the oat milk giant downgraded sales expectations on gloomy growth projections and a struggle to convert more consumers from dairy to plant-based.
The Swedish group now expected full-year revenues in 2022 to total $800m-$830m, significantly lower than the $880m-$920m forecast flagged in April.
CEO Toni Petersson blamed a “challenging operating environment”, referencing the war in Ukraine, ongoing Covid disruption in China and “inflationary and supply chain pressures”.
He added the macroeconomic uncertainty had affected the expansion of its distribution footprint in foodservice and new markets. “The pace at which we have been able to convert new consumers from dairy to plant-based milk is taking longer than we had hoped and we expect this to continue for the remainder of the year,” he said.
It comes as Oatly revealed revenues in the second quarter increased 21.8% to $146.2m as it ramped up global supply in the retail and foodservice channels. However, sales came in below analyst expectations.
Shares in Oatly plunged 15% to $3.34 as the Nasdaq opened today, valuing the group at less than $2bn, a significant fall from the $10bn IPO market cap in May 2021. The stock had initially soared from the $17 float price to highs of almost $29 before a steady collapse as the company failed to live up to market growth expectations.
Net losses for the second quarter ballooned to $72m, widening from $59.1m a year ago, despite gross margins expanding.
The business blamed higher employee-related costs, including share-based bonuses for directors, higher branding and customer distribution expenses, public company costs and other operating expenses as it scales global operations.
Petersson said global consumer demand remained “as strong as ever” and “we have a proven multi-channel strategy that we believe positions us well for long-term growth and profitability”.
Sales in EMEA increased 5% to $82.5m in the quarter to the end of June, while the top line rose 25.2% in the Americas to $51.8m and 66.3% to $43.7m in Asia.
The foodservice channel accounted for 35% of second quarter revenues, up from 33.2% a year ago, with retail making up 56.8%, down from 61.5%, and 8.2% coming from e-commerce and other channels.
First-half revenues at the group increased 20.2% to $344.1m, while net losses rose to $159.4m, compared with $91.4m in the same six months last year.
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