What happened

Shares of Oatly Group (OTLY 0.14%) were down by 13% as of 1:33 p.m. ET Tuesday after the plant-based dairy company reported its second-quarter results.

Revenue growth accelerated from the first quarter to a rate of 21.8% year over year, but investors were looking for more. The most concerning features of the report were the bottom-line loss and management's cautionary statements about near-term business trends. 

So what

Absent the impact of foreign currency changes, Oatly's top line would have increased by 30%. However, in the current economic environment, investors have grown far less tolerant of companies that aren't showing profits. Share prices of companies that haven't been in the black have gotten slammed this year.

Oatly's net loss widened to $72 million in Q2, compared to a $59 million loss in the year-ago quarter. Its cost of goods sold climbed by 39% -- faster than its rate of revenue growth.

Now what

Management's guidance gave investors further reasons to be cautious. While oak milk continues to gain market share, macroeconomic headwinds have hindered the company's ability to expand its distribution in foodservice and new markets. Plus, it is having trouble converting new consumers from dairy to plant-based milk.

Despite those challenges, management expects Oatly's revenue to increase by 29% to 30% in 2022. On a constant-currency basis, it forecasts growth of 30% to 34%. 

Long term, Oatly still has a massive growth opportunity. The $2 billion market cap company's current sales amount to a minuscule share of the $600 billion global dairy market. But its growing brand is part of a secular trend toward plant-based food consumption. Investors should keep this top vegan stock on their radar.