Core Viewpoint - Lamb Weston Holdings, Inc. is facing a class action lawsuit due to alleged violations of the Securities Exchange Act of 1934 related to the implementation of a new ERP system, which reportedly caused significant financial losses for the company [1][2][7]. Group 1: Class Action Lawsuit Details - The class action lawsuit is titled Cleveland Bakers and Teamsters Pension Fund v. Lamb Weston Holdings, Inc., and it allows purchasers of Lamb Weston shares from July 25, 2023, to April 3, 2024, to seek appointment as lead plaintiff by August 12, 2024 [1][4]. - The lawsuit alleges that Lamb Weston and its executives made false or misleading statements regarding the readiness and implementation of the new ERP system, which was not ready for deployment [7]. - On April 4, 2024, Lamb Weston disclosed that the ERP system had significant issues, resulting in a loss of over $130 million in sales during Q3 of fiscal 2024 and a reduction in sales guidance by $330 million for the full fiscal year [8]. Group 2: Financial Impact - The implementation problems with the ERP system led to a more than 19% drop in Lamb Weston’s stock price following the disclosure of these issues [8]. - The lawsuit claims that the defendants were aware of the potential negative impacts of the ERP system's implementation but proceeded regardless, which materially affected the company's business operations [7].

The Chart 1.) I am very disappointed with management, especially for having missed by so much and for two quarters in a row. At this point, it would be good to see them eat their own cooking, and the best way for this to happen is if I see multiple insiders buying Lamb Weston shares in a significant way. Let's not forget, this was a stock trading over $100 per share earlier this year, so if management is not interested in buying shares of the company they run, after it basically gets cut in half in a matter ...

Financial Data and Key Metrics Changes - Sales declined by $83 million or 5% to over $1.61 billion, with volume down 8% and price/mix up 3% [13][31] - Adjusted SG&A expenses decreased by $6 million to $172 million, reflecting lower performance-based compensation [15] - Adjusted EBITDA was $283 million, down $50 million year-over-year, primarily due to lower sales and gross profit [55] Business Line Data and Key Metrics Changes - North America segment sales declined by $47 million or 4%, with volume down 7% and price/mix up 3% [16] - International segment sales decreased by $36 million or 7%, with volume down 9% [33] - Adjusted EBITDA for the International segment fell by 52% to $40 million, impacted by lower sales volume and higher costs [34] Market Data and Key Metrics Changes - U.S. restaurant traffic, particularly in QSRs, was down about 3%, with hamburger chains seeing a decline of over 4% [8] - Internationally, restaurant traffic trends were mixed, with growth in China and Japan but declines in the UK and Germany [9] Company Strategy and Development Direction - The company is focusing on volume-driven sales growth rather than price-driven, with targeted investments in pricing and trade support [7][36] - Strategic actions include integrating acquisitions, modernizing production capabilities, and upgrading IT infrastructure [5][23] - The company anticipates a challenging operating environment in fiscal 2025, with a focus on regaining market share and improving profitability [44][60] Management's Comments on Operating Environment and Future Outlook - Management acknowledged execution challenges and soft global demand for fries, leading to disappointing financial results [4][29] - The company expects volume to decline in the first half of fiscal 2025 but anticipates recovery in the second half due to contract wins and market share recapture [26][62] - Management remains confident in the long-term growth outlook despite current market softness [44][60] Other Important Information - The company plans to target sales of $6.6 billion to $6.8 billion in fiscal 2025, implying growth of 2% to 5% [36] - Capital expenditures for the year are expected to be approximately $850 million, with a notable decrease anticipated in fiscal 2026 [39][65] Q&A Session Summary Question: What is the management's view on the current guidance and conservativeness? - Management indicated a cautious approach due to prolonged negative restaurant traffic trends, which have accelerated recently [97] Question: Can you provide more details on the voluntary product withdrawal? - The product withdrawal was a decision made to maintain product integrity, impacting both the fourth and first quarters financially [99][115] Question: How does the company view its capacity utilization and share losses? - Management refrained from providing specific capacity utilization rates but acknowledged that share losses were partly due to the ERP transition and current market conditions [88][90]

Group 1 - Lamb Weston is experiencing a decline in profits as sales stagnate, with management attributing this to restaurant companies raising menu prices, which has deterred consumers [2][5] - For fiscal 2025, Lamb Weston anticipates a maximum of 5% top-line growth and a decrease in net profits, with a projected net income range of $630 million to $705 million, indicating uncertainty in profitability [2][6] - The company's net sales increased by 21% year-over-year in fiscal 2024, but 99% of this growth was due to acquisitions, highlighting weak consumer demand trends [5] Group 2 - Following the financial results for fiscal Q4 2024, Lamb Weston shares dropped significantly, with a decline of 26% on the reporting day [4] - The current market capitalization of Lamb Weston is approximately $8 billion, and in a worst-case scenario, the stock trades at less than 13 times its forward earnings, making it attractive to value investors [7] - Despite the current challenges, the long-term outlook for the frozen potato market remains stable, suggesting potential for a modest rebound in Lamb Weston stock [3]

Table of Contents FORM 10-K ____________________________________________________________ (Mark One) x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended May 26, 2024 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 1-37830 ____________________________________________________________ Delaware 61-1797411 (State or other jurisdiction of incorporation ...

Core Viewpoint - The company, Lamb Weston Holdings, Inc. (LW), reported disappointing financial results for the fourth quarter of fiscal 2024, with significant declines in net sales and earnings, attributed to market share losses, a voluntary product withdrawal, and a slowdown in restaurant traffic across key markets [14][15]. Financial Performance - Net sales for the quarter were $1,611.9 million, down 5% year over year, missing the Zacks Consensus Estimate of $1,706.5 million [2]. - Volume declined by 8%, primarily due to market share losses and a strategic exit from lower-margin businesses in Europe [2]. - Adjusted gross profit decreased by $72.2 million to $363 million, impacted by a nearly $40 million loss from a voluntary product withdrawal and reduced sales volumes [3]. - Adjusted EBITDA fell by $50.3 million to $283.4 million, mainly due to lower net sales and adjusted gross profit [4]. Segment Analysis - In North America, sales dropped 4% to $1,113.2 million, with a volume decrease of 7% driven by a 5-percentage-point loss in market share [5]. - The International segment saw sales fall 7% to $498.7 million, with volume down 9%, influenced by market share losses and subdued restaurant traffic [19]. Guidance and Future Outlook - For fiscal 2025, the company anticipates a low-to-mid single-digit decline in volume in the first half, with expectations of favorable volume growth in the latter half as it moves beyond prior challenges [9]. - Management projects net sales between $6.6 billion and $6.8 billion for fiscal 2025, reflecting a growth of approximately 2-5% on a constant-currency basis [21]. - Adjusted EBITDA is expected to range from $1,380 million to $1,480 million for fiscal 2025 [22]. Cash and Capital Management - The company ended the quarter with cash and cash equivalents of $71.4 million and long-term debt of $3,440.7 million [7]. - In fiscal 2024, dividends paid amounted to $174 million, and stock repurchases totaled $210 million, with $390 million remaining under the current buyback plan [8].

Core Viewpoint - Lamb Weston experienced a significant decline in share price following disappointing Q4 results, but this may present a buying opportunity for investors as the market adjusts [2][15]. Financial Performance - The company's revenue for the quarter was $1.61 billion, down 5.3% year-over-year, primarily due to an 8% decline in volume, partially offset by a 3% increase in price and mix [7][15]. - The decline in revenue was attributed to a global slowdown in restaurant volumes and the exit from lower-margin businesses, which accounted for approximately 25% of the decline, with the remainder linked to a product recall [7][15]. - Adjusted earnings fell to $0.78, representing a 40% year-over-year decrease, largely due to recall expenses that impacted revenue by an estimated $40 million [9][15]. Market Sentiment and Guidance - The market reacted negatively to the company's guidance for revenue and earnings, which fell below consensus estimates, affecting overall market sentiment [5][15]. - Despite the cautious guidance, the dividend payout ratio is only 30% of the earnings guidance, indicating a stable capital return outlook [5][8]. Dividend and Shareholder Value - The annual dividend is set at $1.44, with a dividend yield of approximately 2.47%, which is at historical highs due to the recent decline in share price [8][16]. - Share repurchases have contributed to shareholder value, reducing the share count by an average of 1.2% in Q4 [10]. Long-term Outlook - Analysts suggest that the current sell-off may be overblown, positioning Lamb Weston as a deep value stock trading near historical lows, with potential for recovery as the market stabilizes [18]. - The company remains a leading supplier in the french fry market, particularly to major clients like McDonald's, which supports its long-term success [18].

Company Performance - Lamb Weston reported quarterly earnings of $0.78 per share, missing the Zacks Consensus Estimate of $1.24 per share, and down from $1.22 per share a year ago [1] - The company posted revenues of $1.61 billion for the quarter ended May 2024, missing the Zacks Consensus Estimate by 5.55%, and down from $1.69 billion year-over-year [4] - The earnings surprise for this quarter was -37.10%, following a previous surprise of -14.29% when earnings were expected to be $1.40 per share but were actually $1.20 [3] Stock Performance - Lamb Weston shares have declined approximately 27.3% since the beginning of the year, contrasting with the S&P 500's gain of 16.5% [5] - The current Zacks Rank for Lamb Weston is 4 (Sell), indicating expected underperformance in the near future [7] Industry Outlook - The Food - Miscellaneous industry, to which Lamb Weston belongs, is currently in the bottom 30% of over 250 Zacks industries, which historically underperform the top 50% by a factor of more than 2 to 1 [2] - The sustainability of Lamb Weston's stock price movement will largely depend on management's commentary during the earnings call [11] Future Earnings Expectations - The current consensus EPS estimate for the upcoming quarter is $1.48 on revenues of $1.67 billion, and for the current fiscal year, it is $6.11 on revenues of $6.76 billion [13] - The upcoming quarterly earnings are expected to be $0.23 per share, reflecting a year-over-year change of +35.3%, although the consensus EPS estimate has been revised 3.3% lower over the last 30 days [14]

International Segment Performance - International segment net sales increased by $1,003.2 million to $2,104.4 million, with $1,107.4 million attributed to the consolidation of LW EMEA and LWAMSA[1] - Excluding acquisitions, international segment net sales declined by $104.2 million, or 9 percent, with a volume decline of 15 percent[2] - Adjusted EBITDA for the international segment increased by $100.9 million to $331.9 million, driven by incremental earnings from LW EMEA consolidation[4] - The international segment saw a significant increase in sales by 91% to $2,104.4 million, driven by a volume increase of 85%[44] - International segment net sales decreased by $35.7 million, or 7 percent, to $498.7 million, with volume down 9 percent[80] Financial Performance - Net income for the fifty-two weeks ended May 26, 2024, was $725.5 million, a decrease of 28.0% compared to $1,008.9 million for the same period last year[27] - Net income for fiscal year 2024 decreased by 28% to $726 million, with diluted EPS declining by 28% to $4.98[63] - Adjusted EBITDA for fiscal year 2024 increased by 13% to $1,416.7 million[63] - Adjusted net income for Q4 2024 decreased by 40% to $113.7 million, with adjusted diluted EPS declining by 40% to $0.78[69] - The diluted EPS for the thirteen weeks ended May 26, 2024, was $0.89, reflecting a decrease from the previous year[45] Cash Flow and Capital Expenditures - Net cash provided by operating activities for fiscal 2024 was $798.2 million, an increase of $36.5 million compared to the prior year[9] - Capital expenditures during fiscal 2024 were $991.8 million, up $255.8 million, primarily for capacity expansion and ERP upgrades[9] - Cash used for capital expenditures in fiscal 2025 is expected to be approximately $850 million, focusing on capacity expansion and information systems upgrades[14] - Cash used for investing activities decreased to $984.1 million, down 26.7% from $1,340.9 million in the prior year[35] Sales and Revenue Trends - Net sales for fiscal year 2024 increased by 21% to $6,468 million, including $1,107 million from acquisitions[63] - Segment net sales for North America decreased by 4% to $1,113.2 million, while international sales decreased by 7% to $498.7 million, resulting in total segment net sales of $1,611.9 million, down 5% year-over-year[37] - In Q4 2024, net sales declined by 5% to $1,611.9 million, with volume down 8% due to market share losses and a voluntary product withdrawal[66] - The company experienced a 21% year-over-year growth in total segment net sales, reaching $6,467.6 million for the thirteen weeks ended May 26, 2024[44] Expenses and Charges - SG&A expenses increased by $151.4 million to $701.4 million, including $12.8 million related to LW EMEA integration[90] - The company recorded a $95.9 million charge for the write-off of excess raw potatoes in North America, impacting net income by approximately $72 million after-tax[27] - The implementation of a new ERP system is estimated to have reduced net sales by approximately $135 million, negatively impacting net income by about $95 million[27] - Adjusted Gross Profit declined by $72.2 million to $363.0 million, impacted by a $40 million charge from a voluntary product withdrawal and lower sales volumes[72] Debt and Equity - Long-term debt and financing obligations, excluding current portion, rose to $3,440.7 million from $3,248.4 million, an increase of 5.9%[32] - The company reported a total stockholders' equity of $1,787.8 million as of May 26, 2024, up from $1,411.3 million a year earlier, indicating a growth of 26.6%[32] - The company issued $592.0 million in debt, with repayments totaling $401.1 million, resulting in a net cash used for financing activities of $48.0 million[35] Market Outlook - The company expects fiscal 2025 net sales between $6.6 billion and $6.8 billion, reflecting growth of approximately 2 percent to 5 percent[12] - Fiscal 2025 net income is projected to be between $630 million and $705 million, with diluted EPS ranging from $4.35 to $4.85[13] - The company expects fiscal 2025 to be challenging due to a supply-demand imbalance in the market[62]

Shareholders who purchased shares of LW during the class period listed are encouraged to contact the firm regarding possible lead plaintiff appointment. Appointment as lead plaintiff is not required to partake in any recovery. CLASS PERIOD: July 25, 2023 to April 3, 2024 NEXT STEPS FOR SHAREHOLDERS: Once you register as a shareholder who purchased shares of LW during the timeframe listed above, you will be enrolled in a portfolio monitoring software to provide you with status updates throughout the lifecycl ...