Oatly Cuts 2026 Profit Outlook Amid Cost Pressures

Oatly's third-quarter revenue grew 9.1% year-on-year to $243.1 million, driven by strong performance in Europe. The company simultaneously lowered its 2026 adjusted EBITDA forecast to a range of $16 million to $20 million, down from a previous expectation of $25 million to $35 million. Gross margin expanded to 34.1% on supply-chain improvements, and adjusted EBITDA for the quarter tripled to $9.4 million.

Constant-currency revenue increased 8.9%, with volume sold rising 4.2% to 156.9 million liters. The company maintained its full-year guidance for 8% to 10% constant-currency revenue growth. Performance varied sharply by region.

Strategic Shifts and Market Challenges

Europe and International was the standout segment, with revenue increasing 19.5% to $147.2 million. Constant-currency revenue there grew 20.4%, volume advanced 17.6%, and retail takeaway sales increased by 17.6%. The segment's adjusted EBITDA climbed by $9.6 million to $31.5 million. During the quarter, Oatly launched a new fibre-focused product platform in this region. The fibre oat milks contain 5g of fibre per 250ml serving and are planned to be available in 11 European markets by the end of 2026.

North American revenue increased by a more modest 2.8% to $63.8 million. Retail takeaway sales grew 7.7%, and the segment's adjusted EBITDA improved to $0.3 million from a prior-year loss. Oatly's value share of oat products in measured U.S. retail channels reached 33.1%. The company plans to launch its fibre oat milk line in North America in early 2027.

Greater China faced significant headwinds. Segment revenue declined to $32.0 million, with constant-currency revenue down 19.3% and volume falling 26.2%. It posted an adjusted EBITDA loss of $1.9 million, a $3.5 million deterioration. Amid these macroeconomic challenges, Oatly launched a strategic review of the business in July 2025, which it expects to complete before the end of the year. A separate review of the China business is set to be completed by the end of 2026.

Profitability Outlook and Cost Pressures

The revised 2026 EBITDA outlook reflects persistent cost inflation. Freight and fuel costs in North America rose faster than anticipated. The conflict in the Middle East and related freight constraints reduced gross margin by approximately 90 basis points. Management expects these cost pressures to weigh most heavily on fourth-quarter results.

CEO Jean-Christophe Flatin stated that while the company has multiple levers to offset pressure, timing delays will adversely impact fourth-quarter profit. He noted inflation in North America is stronger and faster than expected. The revised outlook incorporates the impact of rapidly escalating fuel and freight costs and geopolitical pressures.

Oatly's strategic review completion before year-end 2025 will determine how these cost pressures are addressed in 2026.