Shares of Oatly Group (OTLY +19.12%) popped on Wednesday after the Swedish beverage maker boosted its full-year sales growth outlook.
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Rising sales and margins
Oatly's revenue climbed 15.2% to $240 million in the second quarter. The gains were fueled by strong growth in Europe and other international markets.
During a conference call with analysts, chief operating officer Daniel Ordonez said that oat milk sales are growing faster than those of other plant-based milks, and Oatly is gaining market share in the industry.
Oatly is expanding beyond its base of lactose-intolerant people and environmentally conscious consumers while keeping "taste, health, and sustainability at the core," according to Ordonez.
New flavors and beverage formats are proving popular with younger generations, which Oatly is reaching via live events and creative digital marketing initiatives.
NASDAQ: OTLY
Key Data Points
At the same time, Oatly's cost-reduction and supply chain optimization efforts are helping to improve its profitability.
The plant-based drink maker's gross margin increased by 1.4 percentage points to 33.9%. Its gross profit, in turn, grew 20% to $81.4 million.
And while Oatly is not yet profitable on a net basis, its net loss narrowed to $31.3 million from $55.9 million in the year-ago quarter.
Lifting sales projections
These encouraging results prompted Oatly to raise its full-year constant currency revenue growth guidance to 8%-10%, up from a prior forecast of 3% to 5%.
Management, however, maintained its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) target of $25 million to $35 million, due in part to higher costs associated with conflict in the Middle East.
"Our fundamentals remain strong, and we continue to execute against our growth playbook while maintaining agility to adapt to external factors," chief financial officer Marie-José David said.
