Oatly Group (NASDAQ:OTLY) reported third-quarter revenue growth and a return to positive adjusted EBITDA, while cutting its full-year adjusted EBITDA outlook as rising fuel and logistics costs in North America outpaced its ability to offset inflation.
Chief Executive Officer Jean-Christophe Flatin said the company’s third-quarter results reflected “business resilience,” with growth in revenue and profitability despite elevated costs tied to the Middle East conflict and freight inflation. Revenue increased 9.1% year over year, or 8.9% in constant currency, while adjusted EBITDA improved by $6.3 million from the prior-year period to a positive $9.4 million.
Oatly maintained its full-year 2026 outlook for constant-currency revenue growth of 8% to 10%. However, it lowered projected adjusted EBITDA to a range of $16 million to $20 million, from its prior range of $25 million to $35 million.
Freight and Fuel Costs Prompt Outlook Cut
Management attributed the revised EBITDA outlook entirely to higher costs, particularly U.S. freight and fuel expenses that accelerated after July. Flatin said U.S. diesel prices had risen approximately 70% since the beginning of the Middle East conflict and about 40% since early July.
“The latest wave of logistics and fuel inflation in North America has finally exceeded our capacity to offset,” Flatin said. The company expects freight cost per liter sold in the U.S. during the fourth quarter to be 12.5% above the average level in the first half of 2026, he added.
Oatly has communicated a North American price increase to customers that will take effect in the first quarter of 2027. Global President and Chief Operating Officer Daniel Ordoñez said the company intends to use an innovation-led approach to pricing, including new product formats and packaging changes, rather than relying solely on broad price increases.
Ordoñez said the pricing action would be sufficient to cover cost inflation and would be “selective” and “surgical.” The company is also reviewing pricing in Europe as costs related to the Middle East conflict remain elevated.
Margin Expansion and Regional Results
Third-quarter gross margin rose 436 basis points from a year earlier to 34.1%. Chief Financial Officer Marie-José David said fixed-cost absorption, supply-chain efficiencies, pricing and product mix more than offset inflation and foreign-exchange pressure.
- Europe & International: Constant-currency revenue rose 30.4%, while adjusted EBITDA increased by nearly $10 million year over year. The segment’s adjusted EBITDA margin was 31.4%.
- North America: Constant-currency revenue increased 2.9%, and adjusted EBITDA improved by $1.6 million to $0.3 million. Management said the region continued to outperform a plant-based beverage category that declined at a mid-single-digit rate.
- Greater China: Constant-currency revenue declined 19.3%, reflecting difficult comparisons and continuing pressure in the food-service channel. Adjusted EBITDA was negative $1.9 million, compared with a stronger result a year earlier.
In Europe and International, Ordoñez said constant-currency revenue grew 20.4% and volumes rose nearly 18% in the third quarter. He also pointed to 25% year-over-year growth in the out-of-home channel.
In North America, Oatly reported 8% volume-driven growth despite broader category weakness. The company said it has narrowed the market-share gap with the category leader to about two percentage points, compared with nearly eight percentage points in the summer of 2025. Retail distribution reached a record number of points, led in part by the Barista Edition product line.
Fiber Platform Launches in Europe, U.S. Arrival Planned
Oatly introduced its Oatly Fiber platform, expanding its offerings into wellness-oriented beverages. The product line includes a low-calorie, no-sugar option designed for shakes and a low-sugar Barista Edition intended for coffee and similar drinks.
According to the company, an approximately 250-milliliter serving provides 5 to 6 grams of fiber. Oatly Fiber will be available in 11 European markets by the end of 2026 and is scheduled to launch in the U.S. in January 2027 in 48-ounce packaging.
Ordoñez said the products are intended to address what the company describes as a gap between typical fiber consumption and dietary recommendations. He added that the company expects fiber demand to benefit from consumer interest in gut health, functional beverages and nutrition among users of GLP-1 medications.
Oatly also highlighted its Barista Cold Foam product, designed for out-of-home use in hot and iced drinks, cocktails and other beverages. Management said it plans to develop the product into a global platform.
Cash Flow and Greater China Review
Free cash flow was negative $18.4 million in the third quarter, compared with an outflow of $5.4 million a year earlier. David attributed the larger outflow to the timing of capital expenditures, inventory investments supporting innovation launches and distribution expansion, and a reversal of favorable working-capital timing from the second quarter.
The company ended the quarter with $95 million in total available liquidity, including undrawn bank facilities. Oatly said it expects free cash flow to improve sequentially and year over year in the fourth quarter, though it does not expect positive free cash flow for the full year. Full-year capital expenditure guidance remained unchanged at $20 million to $30 million, with a bias toward the midpoint.
Oatly also expects to complete its strategic review of the Greater China business by year-end. Flatin said the company is evaluating several options, including a potential carve-out, with the goal of accelerating growth, improving operational focus and enhancing consolidated cash returns.
About Oatly Group (NASDAQ:OTLY)
Oatly Group AB is a Sweden-based food and beverage company focused on developing, producing and selling oat-based alternatives to dairy products. Its portfolio includes oat drinks, barista beverages, yogurt-style products, cooking creams, spreads, ice cream and other oat-based foods and beverages.
The company was founded in the 1990s in Sweden, based on research into the nutritional and functional properties of oats. Oatly markets its products under the Oatly brand and emphasizes plant-based nutrition, sustainability and the use of oats as an alternative to dairy ingredients.
Oatly sells its products through grocery retailers, foodservice operators, cafés and e-commerce channels across Europe, North America and parts of Asia.
