Q1 2024 Earnings Summary
Reported on Apr 30, 2024 (Before Market Open)
Pre-Earnings Price$20.00Last close (Apr 29, 2024)
Post-Earnings Price$20.80Open (Apr 30, 2024)
Price Change
$0.80(+4.00%)
- Oatly is gaining market share in both the US and Europe, consistently outgrowing the plant-based milk and oat milk categories. In both markets, Oatly is seeing double-digit growth in scan data since the start of the year, with US Total Distribution Points (TDPs) growing close to 50%. This demonstrates the strength and popularity of the Oatly brand.
- Oatly has reached an agreement on new terms with its largest US foodservice customer, which supports its profitable growth objectives. This agreement is expected to facilitate joint business planning and innovation, leading to more presence, new products, and more consumption occasions. Oatly is also reporting over 30% growth in the foodservice channel outside its largest customer, showcasing the potential of the oat milk category and Oatly's ability to expand aggressively.
- Oatly's expansion into new international markets is progressing successfully, following its proven playbook. The company is seeing rapid market penetration, with uptake in coffee specialty channels reaching above 50% or 60% in key cities like Paris, Barcelona, and Brussels, and achieving number one velocities in retail. This disciplined and asset-light expansion demonstrates the potency of the Oatly brand and its ability to drive growth in new markets.
- Significant challenges in Greater China impacting performance: The company acknowledged that the decline observed in Q1 in Greater China was significant, and the consumer environment remains challenging. They are still in the early stages of their strategic reset in China, implying that recovery may take longer than expected.
- Slowing growth in the overall plant-based milk category: The plant-based milk category is reported as somewhat flattish in Europe and down low single digits in the US, which may limit Oatly's growth potential despite gaining share. Management did not directly address concerns about the category's slowdown.
- Uncertainty around capital investments in Asia: There is uncertainty and delay in decision-making regarding the Asia II facility, with management stating they will take as much time as needed to decide on the factory and regional supply network. This could indicate challenges in their expansion plans in the region.
Research analysts covering Oatly Group.