Financial Performance - Net sales for the third quarter of fiscal 2025 increased by $62.2 million, or 4%, to $1,520.5 million, with volume increasing by 9% compared to the prior year quarter [89]. - North America segment net sales rose by $38.8 million, or 4%, to $986.3 million, with volume increasing by 8% due to recent customer contract wins [91]. - International segment net sales increased by $23.4 million, or 5%, to $534.2 million, with volume up by 12% driven by chain customer contract wins [92]. - Net income decreased by $0.1 million to $146.0 million, impacted by a total net loss of $10.6 million from various unrealized gains and losses [97]. - Net sales for the first three quarters of fiscal 2025 declined by $80.2 million, or 2%, to $4,775.5 million [105]. - North America segment net sales decreased by $87.9 million, or 3%, to $3,162.1 million, primarily due to customer volume losses [107]. - Net income for the thirty-nine weeks ended February 23, 2025, was $237.3 million, compared to $595.8 million for the same period in the prior year [137]. Profitability - Adjusted Gross Profit declined by $6.6 million to $420.4 million, primarily due to unfavorable price/mix and higher transportation costs [94]. - Adjusted Gross Profit declined by $278.7 million to $1,117.0 million, influenced by higher manufacturing and transportation costs [110]. - Adjusted EBITDA increased by $20.2 million to $363.8 million, driven by higher net sales and lower Adjusted SG&A, despite lower Adjusted Gross Profit [98]. - Adjusted EBITDA for the thirty-nine weeks ended February 23, 2025, was $935.6 million, down from $1,133.4 million in the prior year [137]. - Adjusted gross profit for the thirty-nine weeks ended February 23, 2025, was $1,117.0 million, down from $1,395.7 million in the prior year, indicating a decrease of 20% [140]. Expenses and Cost Management - SG&A expenses decreased by $15.6 million to $164.2 million, including various unrealized gains and losses related to currency hedging [95]. - Adjusted SG&A declined by $7.2 million year-over-year to $157.2 million, primarily due to cost savings from the Restructuring Plan and management initiatives [96]. - Interest expense increased by $11.6 million to $47.3 million, reflecting higher total debt and lower capitalized interest [101]. - The company incurred restructuring plan expenses of $76.2 million for the thirty-nine weeks ended February 23, 2025, compared to $84.2 million in the same period of 2024 [140]. Restructuring and Future Outlook - The Restructuring Plan is expected to generate approximately $55 million in pre-tax cost savings and reduce working capital in fiscal 2025 [86]. - Total pre-tax charges related to the Restructuring Plan are estimated to be between $190 million and $210 million [86]. - The company expects sales volumes in the fourth quarter to be slightly higher than in the third quarter, primarily due to growth in the International segment [82]. - The company anticipates an increase in costs per pound in the fourth quarter, reflecting seasonal trends and high input costs [82]. - The company recorded an estimated $135 million impact on net sales due to the ERP transition, with a net income impact of approximately $95 million [137]. Cash Flow and Capital Management - Cash provided by operating activities increased by $3.8 million to $485.3 million for the first three quarters of fiscal 2025, primarily due to $274.0 million in favorable changes in working capital [126]. - Investing activities used $559.0 million in cash during the first three quarters of fiscal 2025, a decrease from $824.8 million in the same period of the prior year, mainly for expanding french fry capacity and facility modernization [127]. - The company decreased its estimated capital expenditures for fiscal 2025 by $100 million to $750 million, excluding acquisitions, due to a pause in the next phase of its ERP build [129]. - During the first three quarters of fiscal 2025, the company borrowed $162.2 million under its revolving credit facility and $525.3 million under new long-term debt facilities [130]. - The company repurchased 2,972,221 shares of common stock at an average price of $61.23 per share, totaling $193.8 million, and paid $154.7 million in cash dividends to common stockholders [130]. Market Risks and Compliance - The company is evaluating the impact of new tariffs but does not expect them to significantly affect fiscal 2025 financial results [83]. - The company remains in compliance with financial covenant ratios and other covenants contained in its debt agreements as of February 23, 2025 [132]. - The company continues to monitor and manage market risks related to currency exchange rates, commodity prices, and interest rates as part of its risk management program [145]. - No material changes to market risk were reported during the thirty-nine weeks ended February 23, 2025 [146].

Core Viewpoint - Lamb Weston reported quarterly earnings of $1.10 per share, exceeding the Zacks Consensus Estimate of $0.87 per share, but down from $1.20 per share a year ago, indicating a 26.44% earnings surprise [1] Financial Performance - The company posted revenues of $1.52 billion for the quarter ended February 2025, surpassing the Zacks Consensus Estimate by 1.36% and showing an increase from $1.46 billion year-over-year [2] - Over the last four quarters, Lamb Weston has exceeded consensus EPS estimates only once [2] Stock Performance - Lamb Weston shares have declined approximately 19% since the beginning of the year, compared to a 3.6% decline in the S&P 500 [3] - The current Zacks Rank for Lamb Weston is 4 (Sell), indicating expected underperformance in the near future [6] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $0.83 on revenues of $1.61 billion, and for the current fiscal year, it is $3.09 on revenues of $6.37 billion [7] - The trend for estimate revisions ahead of the earnings release was unfavorable, which may impact future stock performance [6] Industry Context - The Food - Miscellaneous industry, to which Lamb Weston belongs, is currently ranked in the bottom 21% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] - Another company in the same industry, Post Holdings, is expected to report quarterly earnings of $1.19 per share, reflecting a year-over-year decline of 21.2% [9]

Financial Performance - Net sales for Q3 FY 2025 increased by 4% to $1,520.5 million compared to the prior year quarter[4] - Income from operations rose by 11% to $248.7 million, while net income remained flat at $146.0 million[4] - Adjusted EBITDA increased by 6% to $363.8 million, driven by higher net sales and lower adjusted SG&A[4] - Adjusted net income for Q3 FY 2025 declined by 11% to $156.6 million, with adjusted diluted EPS down 8% to $1.10[4] - For the thirteen weeks ended February 23, 2025, net sales were $1,520.5 million, compared to $1,458.3 million for the same period in 2024, reflecting a growth of 4.3%[32] - The company reported a net income of $146.0 million for the thirteen weeks ended February 23, 2025, compared to $146.1 million for the same period in 2024[32] - The company reported a net income of $237.3 million for the thirty-nine weeks ended February 23, 2025, compared to $595.8 million for the same period in 2024[39] - The company reported total revenue of $1,056.3 million for the thirty-nine weeks ended February 23, 2025, a decrease from $1,378.8 million in the same period of the previous year[47] Sales and Segments - The North America segment reported net sales of $986.3 million, up 4%, with volume increasing by 8%[11] - The International segment's net sales increased by 5% to $534.2 million, with volume up 12% despite soft restaurant traffic[12] - North America segment net sales for the thirty-nine weeks ended February 23, 2025, were $3,162.1 million, a 3% decrease from $3,250.0 million in the prior year[41] Future Projections - The company expects net sales for FY 2025 to be between $6.35 billion and $6.45 billion, with an adjusted EBITDA target of $1.17 billion to $1.21 billion[4] - Net sales target range for fiscal 2025 is projected between $6.35 billion and $6.45 billion[24] - Adjusted EBITDA target range is estimated to be between $1.17 billion and $1.21 billion[24] - Adjusted Net Income is expected to be in the range of $440 million to $460 million, with Adjusted Diluted EPS projected at $3.05 to $3.20[24] Capital Expenditures and Shareholder Returns - Capital expenditures for the first three quarters of FY 2025 were $563.1 million, down $250.7 million from the prior year period[14] - The company returned $151.4 million to shareholders in Q3 FY 2025, including $51.4 million in cash dividends and $100.0 million in share repurchases[16] - Cash used for capital expenditures is projected to be around $750 million, with potential adjustments based on the timing of cash payments for the Argentina expansion[24] - Dividends declared per common share increased to $0.37 for the thirteen weeks ended February 23, 2025, up from $0.36 in the prior year[32] Restructuring and Operational Efficiency - The company incurred a restructuring expense of $9.6 million for the thirteen weeks ended February 23, 2025, and $84.2 million for the thirty-nine weeks ended February 23, 2025[32] - The Company announced a Restructuring Plan on October 1, 2024, details of which are available in the Quarterly Report[4] - The Company’s restructuring efforts are aimed at improving operational efficiency and financial performance moving forward[4] Currency and Other Adjustments - The company experienced foreign currency exchange losses of $17.2 million for the thirteen weeks ended February 23, 2025, compared to $21.8 million for the same period in 2024[8] - Foreign currency exchange losses for the thirty-nine weeks ended February 23, 2025, were $17.2 million, compared to $21.8 million for the same period in 2024[52] - The Company’s financial measures include adjustments for unrealized derivative gains and losses, foreign currency exchange gains and losses, and other items impacting comparability[7] - The company incurred a pre-tax charge of approximately $31 million related to a voluntary product withdrawal during the thirty-nine weeks ended February 23, 2025[42] Depreciation and Amortization - Depreciation and amortization for the thirteen weeks ended February 23, 2025, was $2.0 million, compared to $2.1 million for the same period in 2024[3] - Depreciation expense for the thirty-nine weeks ended February 23, 2025, was $6.1 million, compared to $6.4 million for the same period in 2024[3] - Accelerated depreciation related to the closure of the manufacturing facility in Connell, Washington, amounted to $4.5 million for the thirteen weeks ended February 23, 2025[3] Other Financial Metrics - The effective tax rate for the full year is estimated to be approximately 28%, excluding the impact of comparability items[24] - The total assets increased to $7,422.8 million as of February 23, 2025, up from $7,367.0 million on May 26, 2024[37] - The company incurred integration and acquisition-related expenses amounting to $11.2 million for the thirty-nine weeks ended February 25, 2024[8] - The company estimates that the ERP transition negatively impacted net sales by approximately $135 million, affecting both North America and International segments[8]

Core Insights - Lamb Weston Holdings, Inc. is set to release its third-quarter earnings results on April 3, with analysts expecting earnings of 87 cents per share, a decrease from $1.2 per share in the same quarter last year [1] - The company projects quarterly revenue of $1.49 billion, slightly up from $1.46 billion a year earlier [1] - A quarterly dividend of 37 cents per share was declared on March 20 [1] Stock Performance - Lamb Weston shares increased by 1.6%, closing at $54.15 on Wednesday [2] Analyst Ratings - Barclays analyst Lauren Lieberman maintains an Overweight rating, reducing the price target from $87 to $60 [5] - Stifel analyst Matthew Smith holds a Hold rating, lowering the price target from $80 to $68 [5] - Jefferies analyst Rob Dickerson keeps a Buy rating, raising the price target from $80 to $95 [5] - JP Morgan analyst Ken Goldman maintains a Neutral rating, increasing the price target from $68 to $78 [5] - Deutsche Bank analyst Steve Powers initiates coverage with a Hold rating and a price target of $81 [5]

Core Viewpoint - Lamb Weston Holdings, Inc. is expected to report a decline in its earnings for the third quarter of fiscal 2025, with a consensus estimate of 87 cents per share, reflecting a 27.5% decrease from the previous year [1] Financial Performance - The Zacks Consensus Estimate for Lamb Weston's quarterly revenues is projected at $1.50 billion, indicating a year-over-year growth of 2.9% [2] - Adjusted EBITDA is anticipated to reach $305.7 million, representing an 11% decline for the upcoming quarter [4] Challenges and Market Conditions - The company is facing challenges such as sluggish restaurant traffic, customer share losses, and overcapacity in the global market, which are negatively impacting volume performance [3] - Increased manufacturing costs due to input cost inflation, particularly in raw potato prices, along with higher transportation and warehousing expenses, are exerting additional pressure on the company [4] Strategic Initiatives - Despite the challenges, Lamb Weston is seeing positive outcomes from its Restructuring Plan aimed at improving efficiency and profitability [5] - The company is modernizing its manufacturing capabilities to optimize operations further, which is expected to have a favorable impact on the upcoming quarter [5] Earnings Expectations - The current model does not predict an earnings beat for Lamb Weston, with a Zacks Rank of 4 (Sell) and an Earnings ESP of -3.60% [6]

The market expects Lamb Weston (LW) to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended February 2025. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.The earnings report, which is expected to be released on April 3, 2025, might help the stock move higher if these key numbers are be ...

Core Insights - Lamb Weston is experiencing pressure as its profit margins are significantly lower despite an increase in revenue, indicating potential challenges in maintaining profitability [1]. Financial Performance - The company is achieving higher revenue but is facing significantly lower margins, suggesting inefficiencies or increased costs that are impacting overall profitability [1]. Market Position - There is uncertainty regarding the company's ability to recover from its current financial challenges, raising questions about its competitive position in the market [1].

Core Viewpoint - Lamb Weston Holdings, Inc. is facing significant challenges due to overcapacity in the global market, declining restaurant traffic, and rising manufacturing costs, leading to a decline in both revenue and profit margins [1][10]. Financial Performance - In the second quarter of fiscal 2025, Lamb Weston reported a year-over-year decline in both top and bottom lines, missing the Zacks Consensus Estimate [1]. - The company's stock has decreased by 33.5% over the past three months, underperforming the broader industry, which declined by 4.5% [2]. Volume and Market Challenges - The company experienced a 6% decrease in volume in the second quarter due to softened global restaurant traffic, with North America and international markets seeing declines of 5% and 6%, respectively [5][6]. - Lamb Weston is facing heightened competition, resulting in customer share losses and sluggish demand in the frozen potato market [5]. Cost Pressures - Rising manufacturing costs, particularly for raw potatoes, have negatively impacted profit margins, with transportation and warehousing costs also increasing significantly [7]. - The company reported a $134.9 million drop in quarterly adjusted gross profit and a $95 million decrease in adjusted EBITDA [7]. Revised Financial Targets - Lamb Weston has lowered its annual net sales target range for fiscal 2025 to $6.35-$6.45 billion, down from $6.6-$6.8 billion, reflecting increased competitive pressures and challenges in both North America and international markets [8][9]. - The adjusted earnings per share (EPS) forecast has been revised to $3.05-$3.20, down from the previous projection of $4.15-$4.35 [9].

Group 1 - The article warns investors about the high earnings multiples assigned to Lamb Weston (NYSE: LW) amidst declining margins, suggesting caution in investment decisions [1] - The investing group "Value In Corporate Events" focuses on identifying opportunities in major corporate events such as IPOs, mergers & acquisitions, and earnings reports, providing coverage of 10 significant events monthly [1] Group 2 - The article emphasizes that past performance does not guarantee future results, indicating a need for careful consideration before making investment decisions [2]

Company Performance - Lamb Weston Holdings, Inc. has seen an 18.5% decline in its share price over the past six months, which is significantly worse than the 2.3% decline in its industry and the 1.5% decline in the broader Zacks Consumer Staple sector [1] - The company's second-quarter fiscal 2025 results fell below expectations, with top and bottom lines declining year over year and missing the Zacks Consensus Estimate [4][10] - The quarterly volume decreased by 6%, attributed to weak global restaurant traffic trends and customer share losses, with North America segment volume falling by 5% and International segment volume dropping by 6% [5] Challenges Faced - Lamb Weston is facing challenges such as declining global restaurant traffic, increased competition, overcapacity in the global market, and rising manufacturing costs [2][3] - The company has experienced incremental customer share losses in both North American and International segments due to a competitive landscape, particularly in the Middle East and parts of Asia Pacific [3] - Increased manufacturing costs per pound have been driven by input cost inflation, particularly higher raw potato prices, inefficiencies, and increased transportation and warehousing costs [8] Financial Outlook - Management has revised its annual net sales target range to $6.35-$6.45 billion, down from the previous range of $6.6 billion to $6.8 billion [10] - Adjusted net income guidance has been lowered to $440-$460 million, with adjusted earnings per share (EPS) revised to $3.05 to $3.20 for fiscal 2025, compared to earlier estimates of $600 million to $615 million and adjusted EPS of $4.15 to $4.35 [10] - The company anticipates that challenging conditions will persist through the remainder of fiscal 2025 and into fiscal 2026, driven by continued softening in global frozen potato demand [9]