Oatly’s Beverage Playbook Gains Traction: Top-Line Guidance Raised, Profit Growth Deferred to Investment

Revenue accelerated 15% with volume and mix, but EBITDA guidance held as Oatly absorbs Middle East costs and funds expansion.

OTLY · Earnings Call · 2026-07-22

Oatly Group AB (OTLY) reported a striking second quarter on July 22, 2026: net revenue grew 15.2% (12.7% in constant currency), with Volume growth of 11.2% and positive price/mix of 1.5%. The company raised its full-year constant-currency revenue guidance to 8%–10% from 3%–5% — a meaningful upgrade. Yet adjusted EBITDA was just $0.4 million positive, and management maintained its full-year EBITDA outlook at the low end of $25–$35 million. The gap is intentional: Oatly is reinvesting in its beverage playbook while absorbing cost pressure from the Middle East conflict.

“The second quarter capped a very successful first half with strong volume growth and positive mix driving our revenue momentum,” said CEO Jean-Christophe Flatin. That momentum is increasingly driven by a strategic pivot from oat milk alternative to full beverage company. The company is launching new flavors — Barista Popcorn, Churros, Coconut, Cold Foam — and partnering with Nespresso across 220 boutiques. Europe & International grew 18% in constant currency, led by “very strong volume growth,” while North America improved to 5.9% constant-currency growth, with near-record share of shelf in oat milk.

The trade-off is visible in the P&L. “We have decided, despite the Middle East conflict headwinds, to consciously and carefully reinvest behind the growth in Europe and international in order to fuel the success,” said Global President Daniel Ordoñez in the Q&A. The company absorbed an anticipated phasing of brand reinvestment in Q2, and gross margin still expanded 140 basis points to 33.9%, a sign of underlying operating leverage.

Because we are confident in our beverage playbook, because we see this momentum, we have decided, despite the Middle East conflict headwinds, to consciously and carefully reinvest behind the growth in Europe and international in order to fuel the success.
Daniel Ordoñez, Global President and Chief Operating Officer · 2026-07-22

This is a continuation of a theme from prior calls. In April 2026, Jean-Christophe noted that the Middle East cost impact “will be fully at play in quarter 2,” and the company has consistently framed the conflict as a cost issue rather than a demand issue. In October 2025, Daniel described the growth playbook as “solid continuity” and flagged the potential for a step-change in the U.S. once distribution catches up. The current quarter shows that step-change may be arriving: North America’s positive volume growth and strong out-of-home performance suggest the playbook is transferring.

Greater China remains a wildcard. Revenue grew 5.6% in constant currency, but the segment is still EBITDA-negative, and the strategic review continues — including a potential carve-out, with a decision promised by year-end. That could unlock value or remove a drag, but it adds uncertainty.

For a small-cap (market cap ~$312 million) that has historically struggled to grow profitably, this quarter is a critical inflection. The raised revenue guidance and sustained volume momentum indicate that the brand is resonating with younger consumers, but the unchanged EBITDA guidance underscores that management is prioritizing growth over near-term profit. If the reinvestment pays off — as Europe suggests it can — Oatly could be on the path to durable, profitable expansion. The market will be watching whether the second half confirms the top-line trajectory without further cost surprises.