"Why Oatly Stock Skidded to a Loss This Week"

Oatly Group AB (Nasdaq: OTLY), the world's original and largest oat drink company, has seen its stock price decline significantly over the past month. The company, known for its plant-based dairy alternatives, reported its fourth-quarter and full-year 2024 financial results on February 12, 2025. Despite showing some improvements in revenue and margins, the stock has taken a hit, leaving investors wondering what went wrong.

The primary reason for the stock's decline is the company's earnings miss. For the quarter ended December 2024, Oatly reported revenue of $214.32 million, which was a surprise of -2.85% over the Zacks Consensus Estimate of $220.59 million. This earnings miss indicates that the company did not meet market expectations, which can lead to a decline in stock price. Additionally, Oatly reported a net loss attributable to shareholders of the parent of $91.2 million for the fourth quarter of 2024, compared to a net loss of $298.7 million in the prior year period. While the net loss decreased, it still indicates that the company is not yet profitable, which can be a concern for investors.

Another factor contributing to the stock's decline is the company's decision to close its Singapore manufacturing facility and discontinue construction of its second manufacturing facility in China (Asia III). These changes may have led to concerns about the company's supply chain and future growth prospects. Oatly's CEO, Jean-Christophe Flatin, stated that the company has overhauled its supply chain, overhead structure, and mindset, resulting in a much healthier business with clear strategies, clear accountability, stronger margins, and significantly improved profitability. However, these changes may take time to fully materialize, and investors may be cautious about the company's near-term prospects.

In 2024, Oatly's revenue was $823.67 million, an increase of 5.15% compared to the previous year's $783.35 million. However, the company reported losses of -$201.95 million, which is -51.56% less than in 2023. While the company has shown revenue growth, the continued losses may be a concern for investors, contributing to the stock price decline.

Despite the recent decline, Oatly's strategic transformation has had a positive impact on its financial health and investor confidence in both the short and long term. The company's efforts to overhaul its supply chain and restructure its overhead have resulted in improved financial performance and positioned it for sustained growth and profitability. Oatly expects to achieve its first full year of profitable growth in 2025, with constant currency revenue growth in the range of 2% to 4%, positive adjusted EBITDA in the range of $5 million to $15 million, and capital expenditures in the range of $30 million to $35 million.

In conclusion, Oatly's stock price decline can be attributed to the company's earnings miss, continued net loss, and supply chain changes. However, the company's strategic transformation is expected to result in its first full year of profitable growth in 2025, which may instill confidence in investors in the long term. As always, investors should conduct their own research and consider their risk tolerance before making any investment decisions.