oatly-‘leaving-revenue-on-the-table’-amid-supply-crunch:-analyst

Oatly ‘leaving revenue on the table’ amid supply crunch: Analyst

Oatly (OTLY) shares are tanking after the oat-milk producer missed revenue expectations for its latest quarter and slashed its sales guidance. 

The results were “disappointing, but also transitory,” Cowen senior analyst Brian Holland told Yahoo Finance Live. 

Revenue came in at $171.1 million in the third quarter, missing consensus expectations of $185.7 million, based on Bloomberg data.

The company forecasts sales will come in at more than $635 million for the year, a downward revision from its previous forecast for more than $690 million.

“They guided down … I think resetting expectations is going to help here in the near term. We’re going to reset here after this quarter,” said Holland. 

“The capacity dynamic— that’s something that’s ongoing. With each passing quarter that they can demonstrate that they are able to add capacity as promised, will help the stock.”

“On the cost side I think that’s going to be with us for the next 6-12 months, and that’s not just an Oatly issue. That’s across the industry,” said Holland.

Supply-chain issues including higher logistics and higher container rates, as well as virus-related disruptions in Asia impacted the company’s results. 

“In EMEA, we are starting to build supply to meet consumer demand, but the pace at which we expected to increase revenue in new and existing retailers and to open new markets is slower than we anticipated as we navigate a dynamic COVID operating environment,” Oatly said in its earnings report. 

CHICAGO, ILLINOIS - MAY 20: Oatly oat milk and chocolate oat milk are shown on May 20, 2021 in Chicago, Illinois. Oatly began trading on the Nasdaq today after listing its initial public offering at $17-per-share, giving the company an implied valuation of $10 billion. (Photo Illustration by Scott Olson/Getty Images)

CHICAGO, ILLINOIS – MAY 20: Oatly oat milk and chocolate oat milk are shown on May 20, 2021 in Chicago, Illinois. Oatly began trading on the Nasdaq today after listing its initial public offering at $17-per-share, giving the company an implied valuation of $10 billion. (Photo Illustration by Scott Olson/Getty Images)

“We believe this is primarily a timing issue and in the first half of 2022, we expect to have an increased share of shelf space at retail given our strong velocities and current supply levels.”

“In the Americas, we are pleased with the weekly production output improvements at our Ogden, Utah facility to-date in the fourth quarter, as we navigate a challenging supply chain environment,” the company added. 

Holland notes the company’s top line will improve as supply issues ease.

“Oatly is leaving revenue on the table with their inability to supply,” said Holland. “As that improves— and again — these are the transitory issues. You’d much rather be in this situation right now where this is a supply issue rather than a demand issue.”

Oatly went public in May. On Monday, shares were trading as much as 46% below their IPO price of $17 each.

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