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Oatly CEO Toni Petersson said there was light at the end of the tunnel regarding the shortage of oat milk that existed during the pandemic due to much higher consumption of ‘packaged foods at home.
“No,” Petersson replied when asked by Yahoo Finance if the shortage would continue until 2022. “It will improve. It has improved since March. It will continue to increase [product availability] every month here. “
To help improve demand, Oatly said it will increase production capacity at its Ogden, Utah, plant and facilities in Asia and Europe. The company plans to increase production by 200% by the end of 2022, compared to 2020.
Persistent supply constraints weighed on Oatly’s performance in the second quarter. Sales increased 53.3% year-on-year. The loss in Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $ 31.9 million, compared to a loss of $ 1.2 million a year ago.
Here’s how Oatly performed against Wall Street analysts’ estimates for the second quarter:
The company reiterated its long-term goals for a gross margin of 40% and an EBITDA margin close to 20%.
Oatly shares rose 1% to $ 17 in Monday’s trading, putting the stock price in line with the IPO price in mid-May. The stock had peaked at $ 28 in mid-June amid optimism about the outlook for oat milk demand and Oatly’s leadership position in the market. But stocks came under pressure in mid-July following an attack on the company’s financial reports by short seller Spruce Point.
Oatly was quick to rebut Spruce Point’s claims.
Jefferies analyst Rob Dickerson said he came away with a positive outlook after a meeting with post-earnings management.
“In our follow-up call with mgmt. Today, we were told that nothing in the recent short report could be corroborated by internal and external analysis conducted by Oatly and this is where OTLY is going to leave it. While we understand the points made in the Competitive Dynamics report, we still find it too early to call long-term equity pressure issues given the lack of real-time data across geographies and channels and given that the company is limited by supply. We will continue to monitor the situation, but the expectation now is that we should start to see improvements in sharing positioning in YE in the Americas as the incremental capacity is increased. online and that Oatly is able to better expand distribution even with pre-existing customers, Dickerson said in a note to customers.
When asked by Yahoo Finance if he has a message for investors following the short sellers report, Petersson said Oatly remains a growing company.
“We want to say a lot of things. But we are well positioned to play a global leadership role in promoting the plant-based revolution. We haven’t even started to scratch the surface yet and the track is huge,” Petersson mentioned.
At this point, Oatly recently started selling soft serve ice cream. The surface is scratched, it seems.
Brian Sozzi is an editor and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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