Oatly Group AB cut its sales outlook and announced an improvement plan in Asia as consumers in the region moved away from its drinks post-Covid.
(Bloomberg) — Oatly Group AB cut its sales outlook and announced an improvement plan in Asia as consumers in the region moved away from its drinks post-Covid.
The oat-drink maker now expects full-year revenue growth in a range of 7% to 12% on a constant-currency basis, down from 23% to 28% previously.
Shares tumbled 12% at 8:30 a.m. in early New York trading. The stock has gained 25% this year through Wednesday, outpacing the S&P 500 Index’s 19% rise.
The plan, modeled on similar strategies in Europe, the Middle East and Africa and in the Americas, is intended to strengthen the business and then lead to growth. It includes a simplification of the portfolio of products and reduced operating costs.
“As Asia has transitioned to a post-pandemic era, consumers have behaved differently than we had originally expected and we need to adjust,” Oatly Chief Executive Officer Jean-Christophe Flatin said in a statement.
“We have also taken actions to further simplify our corporate functions and Americas segment overhead, which will lead to additional cost savings as well as increased focus and agility,” he said.
The Malmö, Sweden-based company expects cost savings of about $85 million in 2024. The changes in Asia could also result in an impairment charge, which might include severance and other costs, of a size yet to be determined.
Oatly reported second-quarter revenue that missed analysts’ estimates.
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