Oatly lifts 2026 revenue outlook as Q2 margins and volumes expand
Oatly raised its 2026 revenue growth forecast after a strong second quarter drove margin expansion and volume gains, signaling that its turnaround strategy is gaining traction despite lingering cash flow concerns.
Oatly Group raised its full-year constant-currency revenue growth projection to 8% to 10%, abandoning a prior forecast of 3% to 5%. The oat milk producer reported second-quarter net revenue growth of 15.2%, driven by rising demand, product innovation and expanded distribution.
Underlying volume growth of 11.2% powered the quarterly performance, with price mix adding 1.5% and foreign exchange providing a 2.5% tailwind, according to Chief Financial Officer Marie-José David. For a company that has historically burned through cash, the real significance for investors lies in the improving margin structure. Gross margins expanded by 140 basis points to 33.9%, supported by fixed-cost absorption, supply chain efficiencies and a favorable channel mix. This operational leverage pushed adjusted EBITDA to positive $0.4 million, a $4 million improvement from the prior year.
The sales momentum was broadly distributed across key markets. Europe and International operations led the charge, while North America posted its second consecutive quarter of positive volume growth and captured near-record market share. Chief Executive Officer Jean-Christophe Flatin said the results capped "a very successful first half" and proved the company is building a more profitable growth model.
However, the updated guidance comes with clear limits. Oatly maintained its expectation for full-year adjusted EBITDA at the low end of the $25 million to $35 million range. Management pointed to ongoing cost inflation tied to the conflict in the Middle East and the need to continue spending on growth initiatives. Furthermore, the company still does not anticipate achieving full-year positive free cash flow in 2026, even after posting sequential improvement in the second quarter.
Looking ahead, the strategic future of the Chinese business represents the largest unknown for shareholders. Oatly confirmed it is reviewing the division, explicitly weighing a potential carve-out as a way to accelerate regional growth and maximize corporate value. How management ultimately structures that separation will likely dictate the stock's next major move as the company attempts to transition from a turnaround story to a reliable profit generator.
