Shares Plummet After Disappointing Q4 Earnings
Oatly Group AB (OTLY) shares are plummeting after a disappointing fourth-quarter earnings report. The Malmö, Sweden-based company reported a fourth-quarter loss per share of $(0.50), significantly wider than the analyst consensus of $(0.15). Despite this, the company managed to surpass quarterly revenue expectations, reporting $204.12 million compared to the estimated $191.34 million.
The company demonstrated a revenue growth of 4.6% compared to the prior year period, with a 2.5% increase in constant currency revenue. The growth was fueled by a rise in both the retail and food service channels, indicating a broad yearning for Oatly products. However, this was partially offset by a decline in other channels in the fourth quarter.
Oatly experienced a 2% uptick in sold volume for the fourth quarter, reaching 140 million liters, while its gross margin surged to 23.4%, marking a substantial 7.5 percentage points increase compared to the previous year. The company also managed to improve its adjusted EBITDA loss to $19.2 million, a remarkable $41.2 million improvement compared to the prior year’s period.
As of December 31, 2023, Oatly held $249.3 million in cash and cash equivalents but also carried a total outstanding debt of $443.8 million. Looking towards the future, Oatly is upbeat about its revenue growth prospects for the full year 2024, with a forecast in the range of 5% to 10% on a constant currency basis. However, the company foresees an adjusted EBITDA loss ranging between $35 million to $60 million, with capital expenditures expected to be below $75 million.
In response to the earnings report, OTLY shares are trading 15.1% lower at $1.14, demonstrating the market’s dissatisfaction with the results.