MALMO, SWEDEN — The Oatly Group AB’s string of quarterly losses continued during the first quarter of fiscal 2023 as the company works to expand distribution globally, adapts to a new processing structure in North America and seeks to achieve profitability in 2024.

For the quarter ended March 31, the company recorded a loss of $75.6 million, which compared with a loss of $87.6 million the year prior.

Quarterly sales rose 17.7% to $195.6 million from $166.2 million the year before.

A 5% decrease in selling, general and administrative expenses to $99 million from $104 million the year before led to the narrower loss.

In January, Oatly announced it was divesting some manufacturing assets in North America and selling them to Ya YA Foods, Etokicoke, Ont. The move was part of the company’s plan to hybridize its manufacturing footprint.

“The transition to Ya YA Food is going very well, which has largely been enabled by not only Ya YA’s deep operational experience but also Ya YA hiring Oatly frontline employees,” said Toni Petersson, chief executive officer, during a May 9 conference call with securities analysts. “We are pleased with the progress and see that our service levels have remained in the mid-90s. The successful transition to Ya YA is enabling us to consolidate our co-packer network.”

Mr. Petersson said the company terminated several agreements with co-manufacturers during the first quarter.

“We expect this consolidation to have material benefit on our cost structure as we are moving from a costly, inefficient situation where we have to search far and wide for partners to a more simple and efficient structure that is lower cost,” he said. “We expect a complete operational consolidation to be complete by the end of third quarter.”

In Europe, the Middle East and Africa (EMEA), Oatly’s largest business unit, sales increased 8.5% to $98.2 million during the first quarter, up from $90.5 million the year before.

“EMEA showed strong volume growth in the face of the recent price increases as elasticities remained muted,” said Christian Hanke, chief financial officer.

Mr. Petersson added, “The total EMEA category growth remained quite robust with oat milk continuing to grow double-digit rate on a year-over-year basis. And our key markets of Germany, UK and Netherlands continued to post very strong market shares. We have also continued to sign up new customers in foodservice.”

In the Americas, sales rose 36% to $64 million from $47 million the year before. The sales increase was primarily due to price increases during the third quarter combined with volume growth of 6.5 percentage points across oat drink products, according to the company.

“Given that our supply chain is stable, we have been able to drive good distribution expansion in retail, largely driven by an increase in the number of items per distribution point while also seeing good expansion in the number of stores,” Mr. Petersson said. “We expect that our promotional rates will continue to increase in the coming months. The promotions are not only intended to drive consumer demand, but they also send an important signal to our retail customers that we are confident in our supply chain stability and ability to service the demand.”