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Oatmilk pioneer Oatly delivered another quarter of financial progress in Q2 even as it rode its evolution into a broader beverage company, marked by efforts to capture younger consumers’ attention via launches like churros-flavored and cold foam entries in its Barista line. Sales rose 15.2% to $240.1 mil, +12.7% on constant-currency basis, on volume lift of 11.2% and price/mix benefit of 1.5%. In core Europe & Int’l segment, sales surged 21% to $143.1 mil, +18% adjusted for foreign exchange, on 16.9% volume and 1.1% price/mix. In N Amer market, which is in early stages of adopting revamped strategy honed in Europe while cycling departure of Starbucks as key foodservice customer, sales rose more modest 5.9% to $66.9 mil on 1.9% volume and 4% price/mix. Challenging China market, where co has resolved to finalize its strategy by year-end, enjoyed 11.6% sales gain to $30.1 mil, +5.6% in constant currency compounded of 5.5% volume and 0.1% price/mix. Gross margin widened 1.4 pts to 33.9% despite ongoing inflationary impact of Trump war in Middle East. Swedish-based co continued to narrow its adjusted EBITDA losses, eking out positive $422K vs $3.6 mil loss a year earlier. Effort to get its free cash flow into positive territory will only be delayed by co’s decision to invest in inventory and capital spending to capitalize on brand momentum, tho those investments will be made “meticulously, market by market, channel by channel,” assured CEO Jean-Christophe Flatin. Oatly is advancing its full-yr growth expectations from 3-5% to 8-10% now.Wall Streeters seemed to appreciate the sense of progress. “The playbook is working with strength in Europe/Int'l (driven by both new and existing customers),” assessed Jefferies’ Kaumil Gajrawala. “We think this can be replicated in North America.”What does Flatin mean by push to becoming a “full-on beverage company”? It seems to mean moving beyond early oatmilk adopters motivated by lactose-intolerance or environmental sustainability issues to broader, youthful consumer base that’s taking its cues from colorful recipes that are flourishing in coffee shops and other out-of-home channels. Oatly in turn is trying to influence that channel’s direction via “look book” adopted from fashion biz heralding latest recipes (it’s on its third now with 63 new recipes like a Matcha Jell-O Shot) and events like one dubbed Aftertaste that brought media influencers and culture leaders to NY’s Flatiron District this past spring. The stickier innovations end up migrating to retail, as with recent Barista Edition entries like Popcorn, Coconut and Churros as well as expanded Matcha range. Also key has been Barista Cold Foam launch, which allows brand to better tap into “mixology movement.” These efforts are all being amplified by ongoing collab with Nespresso and stunts like “Losers drink free” initiative during World Cup that generated 600 mil impressions and bikethru kiosk in Amsterdam that generated another 100 mil.By account of Flatin and his prexy/COO Daniel Ordonez this morning, the growth is reassuringly balanced across multiple markets. Outreach to younger consumers has revitalized Swedish market that had been flat, which “gives us confidence there’s no such thing as a mature market,” Ordonez said. Expansion into several new geographic markets “is paying off handsomely,” with sales growth of 82%.Then there’s North America, which scored 2d consecutive qtr of volume growth after declines thru 2025, as CFO Marie-José David pointed out. Momentum from new and existing customers should soon “eliminate the headwind from the customer who was previously our largest in this channel,” Ordonez promised, apparently referring to Starbucks. That diversification will yield “greater balance and resiliency.” Meanwhile, co is deepening its presence at key retail partners Costco, Walmart and Whole Foods. Crucially, some of its new items will be picked up off-cycle by some unidentified retailers starting in Q3 this year, rather than having to queue up for traditional reset windows around Feb. That’s a “proof point of the relevance we’re bringing,” COO argued.Teasing Fiber News Tho oats have traditionally served as key fiber source in western diets, Oatly hasn’t made much of that benefit in the past. That seems about to change. Ordonez termed himself “super-excited” about spike in search activity in US and Europe for terms like “gut health” and “fiber,” so Oatly is honing plans to capitalize on that. “We see significant opportunity there,” he teased. “Stay tuned for exciting stuff coming up in the next few months.” No further clues for now as to whether that involves marketing direction, new products or both.

Oatly Cuts Q2 Cash Burn While Advancing Strategy of Becoming ‘Full-On Beverage Company’; Raises Full-Year Topline Guidance

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