MALMÖ, Sweden - Oatly Group AB (NASDAQ:OTLY), the global oat drink leader, reported a revenue beat in the first quarter of 2024, with a 1.8% increase to $199.2 million compared to $195.6 million in the same period last year. This performance exceeded the consensus estimate of $197.74 million, prompting a positive investor response as shares climbed 5%.
The company's adjusted earnings per share (EPS) for the quarter met analysts' expectations at -$0.08. Despite the static EPS, the revenue growth, particularly in Europe & International and North America segments, drove investor sentiment, as reflected in the stock's upward movement.
Jean-Christophe Flatin, CEO of Oatly, expressed satisfaction with the company's strong start to the year, highlighting improved volumes, reduced costs, and a fortified business. "We are clearly making progress on the three strategic pillars we are focusing on in 2024: bring the Oatly magic to more people, continue our work on the calibration of resources, and focus on execution," Flatin said. He also noted that while the results were promising, the company's full-year guidance remains unchanged, reflecting cautious optimism.
The company's gross margin improved significantly, rising by 9.7 percentage points to 27.1% in the first quarter. This increase was attributed to enhanced supply chain efficiency across all segments, with North America making the largest impact. Oatly also reported a reduced net loss of $45.8 million, an improvement over the $75.6 million loss in the prior year's quarter. Adjusted EBITDA loss also saw a notable improvement, shrinking to $13.2 million from a loss of $49.9 million year-over-year (YoY).
For the full year 2024, Oatly reiterated its outlook, forecasting constant currency revenue growth between 5% to 10%, an adjusted EBITDA loss ranging from -$35 million to -$60 million, and capital expenditures below $75 million. These projections align with the mid-point of the guidance range provided, which remains consistent with the analyst consensus.
The company's performance in the first quarter was bolstered by growth in the retail channel, with sold volume increasing by 3.1% to 132 million liters. Oatly's strategic focus and execution, particularly in the Europe & International and North America segments, have contributed to this positive outcome, even as the Greater China segment experienced expected declines due to a strategic reset initiated last year.
Oatly's balance sheet showed $209.0 million in cash and cash equivalents, with a total debt of $453.8 million. The company's cash flow also improved, with net cash used in operating activities decreasing to $39.1 million from $71.2 million YoY.
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