Oatly stock slides 5% premarket as earnings fall short of estimates hurt by COVID restrictions in Asia, strong dollar

Oatly Group AB
OTLY,
-18.98%
stock slid 5% in premarket trade Monday, after the Swedish maker of oat-based dairy products posted a wider-than-expected third-quarter loss and revenue that fell short of estimates. The company had a net loss of $107.9 million, or 18 cents a share, in the quarter, wider than the loss of $41.2 million, or 7 cents a share, posted in the year-earlier period. Revenue rose to $183.0 million from $171.1 million a year ago. The FactSet consensus was for a loss of 10 cents and revenue of $210 million. “Third quarter financial results were below our expectations, largely driven by COVID-19 restrictions in Asia, production challenges in the Americas, and continued foreign exchange headwinds,’ Chief Executive Toni Petersson said in a statement. The company has taken strategic measures to adapt its supply chain network and simply its structure with the aim of using an asset-light approach to improving profitability. “The framework for the supply chain network strategy is centered on focusing investments on Oatly’s proprietary oat-base technology and capacity, which is expected to reduce the capital intensity of future facilities and have a positive effect on our cash flow outlook,” said the statement. Oatly is also pursuing manufacturing partners to create a hybrid production network in certain regions. It expects to cut overhead and head count to cut up to 25% of costs related to group corporate functions and regional EMEA layers, seeking up to $25 million in annual svings in the first half of 2023. Oatly is now expecting full-year revenue of $700 million to $720 million, compared with consensus of $793.20 million. The stock has fallen 69% in the year to date, while the S&P 500
SPX,
-0.41%
has fallen 16%.