Oatly Q2 Losses Narrow, Revenue Beats Expectations

Oatly Group reported a Q2 loss per ADS of $1.86, compared to a loss of $1.02 last year. Revenue was $208.4M, up from $202.2M last year. CEO Jean-Christophe Flatin said the company made progress on its 2025 priorities, including driving cost efficiencies and top-line momentum in the Europe & International segment. However, the company reported slower-than-expected top-line progress in the North America segment and a soft macro-environment in Greater China.

Oatly Group AB (OTLY) reported its second-quarter financial results, showing a 3.0% year-over-year revenue increase to $208.4 million, despite facing slower-than-expected growth in North America and a challenging macro-environment in Greater China. The company's CEO, Jean-Christophe Flatin, highlighted progress on the company's 2025 priorities, including driving cost efficiencies and top-line momentum in the Europe & International segment.

Revenue growth was primarily driven by strong performance in Europe, where revenue increased by 12.0% to $118.2 million, supported by a 9.4% volume growth. However, sales in North America declined by 6.8% to $63.2 million, reflecting lower sales to Oatly's largest foodservice customer. Revenue in Greater China also fell by 6.4% to $27.0 million amid continued macroeconomic pressure.

The company's gross margin improved to 32.5% in the second quarter, up by 3.3 percentage points from a year ago, supported by continued supply chain efficiencies. Despite the revenue growth, Oatly reported an adjusted EBITDA loss of $3.6 million, an improvement of $7.4 million compared to the same period last year. However, the company's net loss widened to $55.9 million from $30.4 million, mainly due to fair value losses on convertible notes.

Oatly has adjusted its full-year revenue outlook to roughly flat to +1% in 2025, down from its earlier projection of +2% to +4%. The company has also revised its capital expenditures for the year downward to approximately $20 million, compared to previous guidance of $30 million to $35 million.

In response to ongoing challenges in China, Oatly has launched a strategic review of its Greater China operations, which may include a potential carve-out to unlock growth opportunities and enhance shareholder value. The company continues to drive additional cost efficiencies to keep it on-track to deliver on its profitability commitment.

Wall Street analysts have provided a range of price targets for Oatly, with an average target price of $22.70, implying an upside of 49.05% from the current price of $15.23. The average brokerage recommendation is currently 2.3, indicating an "Outperform" status.

References:
[1] https://www.gurufocus.com/news/2996650/oatly-otly-experiences-revenue-growth-in-q2-amid-global-challenges-otly-stock-news
[2] https://ih.advfn.com/market-news/article/13298/oatly-revenue-climbs-as-european-strength-offsets-north-american-and-china-softness
[3] https://investors.oatly.com/news-releases/news-release-details/oatly-reports-second-quarter-2025-financial-results