Shares of Oatly Group (OTLY 14.37%) were having another rough quarter as the oat milk company disappointed investors in its fourth-quarter earnings report.
Oatly topped revenue estimates in the fourth quarter, but the company continued to struggle on the bottom line and offered weak guidance.
As of 12:30 p.m. ET, the stock was down 14.8%.
Image source: Oatly.
Oatly continues to struggle
Oatly's revenue growth remained sluggish with overall sales up 4.6% to $204.1 million, though that was better than the consensus estimate of $191.3 million.
Revenue declined 18.9% in Asia, which was a promising growth market at one point, to $33 million, and was up just 2% in the Americas, a significant deceleration. Its biggest region, which encompasses Europe, the Middle East, and Africa, reported 17% revenue growth to $105.2 million.
Oatly's efforts to recalibrate the business did lead to improving margins, but it wasn't enough to please investors. Gross margin in the period rose 6 percentage points to 23.4%, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) improved from a loss of $41.2 million to a loss of $19.2 million.
Its generally accepted accounting principles (GAAP) loss was $298.8 million, or $0.50 a share, which included one-time charges of roughly $200 million.
CEO Jean-Christophe Flatin said: "I am proud of the progress that we made throughout 2023. It was a pivotal year where we executed a significant recalibration of the entire organization to stabilize our business and ensure we are properly positioned for long-term success."
Can Oatly turn it around?
Looking ahead to 2024, Oatly's guidance didn't give investors much confidence in a recovery. Constant-currency revenue growth is expected to grow 5% to 10%, which compares to 8.7% growth in 2023.
On the bottom line, it expects an adjusted EBITDA loss of $35 million to $60 million.
Investors seemed to be hoping for more improvement on the bottom line as Oatly's once-strong growth has faded. Until the company turns a profit or growth accelerates, Oatly continues to look like a stock best avoided.
