Shares of Post Holdings (NYSE: POST ) have been a solid performer over the past year as it has successfully integrated M&A deals, enabling solid free cash flow results. That said, shares have ticked down in recent days, amidOver fifteen years of experience making contrarian bets based on my macro view and stock-specific turnaround stories to garner outsized returns with a favorable risk/reward profile. If you want me to cover a specific stock or have a question for an article, just let me know!Analyst’s Dis ...

Lamb Weston (LW) came out with quarterly earnings of $0.66 per share, missing the Zacks Consensus Estimate of $1.02 per share. This compares to earnings of $1.45 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -35.29%. A quarter ago, it was expected that this frozen foods supplier would post earnings of $0.73 per share when it actually produced earnings of $0.73, delivering no surprise.Over the last four quarters, the company ...

Key TakeawaysLamb Weston appointed a new CEO Thursday as the maker of frozen fries swung to a surprise second-quarter loss and cut its fiscal 2025 guidance.The Idaho-based company reported a second-quarter loss of $36.1 million, or $0.25 per share, while analysts were expecting a profit of $88.0 million, or $0.61 per share.Lamb Weston shares fell almost 20% in premarket trading. Shares of Lamb Weston (LW) plunged nearly 20% in premarket trading Thursday after the maker of frozen fries swung to a surprise lo ...

Financial Performance - Net sales declined 8% to $1,601 million in Q2 FY2025 compared to Q2 FY2024[2] - Net income declined $251 million to a loss of $36 million in Q2 FY2025[2] - Adjusted EBITDA declined 25% to $282 million in Q2 FY2025[2] - Net sales for the thirteen weeks ended November 24, 2024 decreased to $1,600.9 million from $1,732.1 million in the prior year period[44] - Gross profit for the thirteen weeks ended November 24, 2024 declined to $277.8 million from $475.6 million in the prior year period[44] - Net income for the thirteen weeks ended November 24, 2024 was a loss of $36.1 million compared to a profit of $215.0 million in the prior year period[44] - Net income for the period ended November 24, 2024, was $91.3 million, compared to $449.8 million in the same period last year[53] - Net income for the twenty-six weeks ended November 24, 2024, was $91.3 million[65] - Adjusted diluted EPS for the thirteen weeks ended November 24, 2024, was $0.66, compared to $1.48 in the same period last year[61] - Diluted EPS for the twenty-six weeks ended November 24, 2024, was $0.64[65] Segment Performance - North America segment net sales declined 8% to $1,072.1 million in Q2 FY2025[16] - International segment net sales declined 6% to $528.8 million in Q2 FY2025[19] - North America segment net sales decreased by 8% to $1,072.1 million, with a 3% decline in price/mix and a 5% decline in volume[56] - International segment net sales decreased by 6% to $528.8 million, driven entirely by a 6% decline in volume[56] - North America segment Adjusted EBITDA decreased by 17% to $266.7 million[56] - International segment Adjusted EBITDA decreased by 53% to $47.4 million[56] - North America segment Adjusted EBITDA for the twenty-six weeks ended November 24, 2024, was $542.8 million[70] - International segment Adjusted EBITDA for the twenty-six weeks ended November 24, 2024, was $97.9 million[70] Cost and Expenses - Adjusted Gross Profit declined $134.9 million to $343.5 million in Q2 FY2025[12] - Restructuring expenses for the thirteen weeks ended November 24, 2024 totaled $74.6 million, primarily related to facility closures and employee severance[44] - Cost of sales for the thirteen weeks ended November 24, 2024 included $75.5 million in charges for unused raw potatoes and inventory write-offs[44] - The twenty-six weeks ended November 24, 2024 included a $39 million charge related to a voluntary product withdrawal[46] - Restructuring Plan expenses for the twenty-six weeks ended November 24, 2024, were $159.1 million[70] - Unallocated corporate costs for the twenty-six weeks ended November 24, 2024, were $(68.9) million[70] - Income tax expense for the twenty-six weeks ended November 24, 2024, was $64.2 million[65] - Interest expense for the twenty-six weeks ended November 24, 2024, was $88.5 million[65] Cash Flow and Liquidity - Net cash provided by operating activities for the first half of fiscal 2025 was $429.3 million, down $25.9 million versus the prior year period[22] - Capital expenditures during the first half of fiscal 2025 were $486.4 million, down $73.0 million versus the prior year period[23] - The Company had $79.0 million of cash and cash equivalents and $1,211.9 million of available liquidity under its revolving credit facility as of November 24, 2024[25] - Cash and cash equivalents increased to $79.0 million as of November 24, 2024 from $71.4 million as of May 26, 2024[50] - Net cash provided by operating activities was $429.3 million, slightly down from $455.2 million in the previous year[53] - Additions to property, plant, and equipment were $474.6 million, down from $507.6 million in the previous year[53] - Proceeds from short-term borrowings increased significantly to $811.6 million, compared to $194.3 million in the prior year[53] Shareholder Returns - The Company returned $103.3 million to shareholders through cash dividends and repurchased $82.0 million of its common stock in the first half of fiscal 2025[26] - The Board of Directors approved an increase of $250 million in the Company's share repurchase authorization, bringing the total to $750 million[27] - Repurchase of common stock and common stock withheld to cover taxes amounted to $92.8 million, down from $164.3 million in the previous year[53] Outlook and Targets - Updated fiscal 2025 outlook projects net sales of $6.35 billion to $6.45 billion[2] - The Company reduced its annual net sales target range to $6.35 billion to $6.45 billion, down from $6.6 billion to $6.8 billion[29] - The Company reduced its GAAP net income target range to $330 million to $350 million and Diluted EPS to $2.30 to $2.45[30] - The Company reduced its Adjusted EBITDA target range to $1,170 million to $1,210 million from approximately $1,380 million[31] - The Company reduced its Adjusted Net Income target range to $440 million to $460 million and Adjusted Diluted EPS to $3.05 to $3.20[32] - The Company expects cash used for capital expenditures, excluding acquisitions, to be approximately $750 million[33] Restructuring Plan - Restructuring Plan expected to generate $55 million in pre-tax cost savings in FY2025[7] - Restructuring expenses for the thirteen weeks ended November 24, 2024 totaled $74.6 million, primarily related to facility closures and employee severance[44] - Restructuring Plan expenses for the twenty-six weeks ended November 24, 2024, were $159.1 million[70] Volume and Traffic Trends - Volume declined 6% in Q2 FY2025, reflecting soft global restaurant traffic trends[9] - North America segment net sales decreased by 8% to $1,072.1 million, with a 3% decline in price/mix and a 5% decline in volume[56] - International segment net sales decreased by 6% to $528.8 million, driven entirely by a 6% decline in volume[56] Equity and Investments - Equity method investment earnings were $2.1 million in Q2 FY2025[21] Balance Sheet - Inventories increased to $1,327.2 million as of November 24, 2024 from $1,138.6 million as of May 26, 2024[50] - Long-term debt increased to $3,693.6 million as of November 24, 2024 from $3,440.7 million as of May 26, 2024[50] - Total assets increased to $7,452.1 million as of November 24, 2024 from $7,367.0 million as of May 26, 2024[50] Adjusted Metrics - Adjusted EBITDA for the twenty-six weeks ended November 24, 2024, was $571.8 million[70] - Gross profit for the twenty-six weeks ended November 24, 2024, was $633.8 million[65]

Lamb Weston Holdings, Inc. (LW) is facing pressure from JANA Partners, one of the company’s largest shareholders with more than 5% ownership. In the latest development, JANA Partners sent a letter to Lamb Weston, stressing that the latter needs major changes in its board and leadership. In the absence of any changes, JANA believes that LW should consider exploring strategic options, including a possible sale, to get the best value for its shareholders.Recent reports also suggested that Post Holdings (POST) ...

Lamb Weston (LW) shares rallied 6.8% in the last trading session to close at $79.27. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 7.7% loss over the past four weeks.Lamb Weston shares surged following reports that Post Holdings is exploring a potential deal with the Idaho based company. Apart from this, Lamb Weston has been benefiting from a favorable pricing environment and seeing strong results from its ...

Core Viewpoint - Lamb Weston Holdings, Inc. is expected to report a decline in both revenue and earnings for the second quarter of fiscal 2025, with revenue estimated at $1.7 billion, reflecting a 3.5% decrease year-over-year, and earnings per share projected at $1.05, indicating a 27.6% decline from the previous year [1] Group 1: Financial Performance Expectations - The Zacks Consensus Estimate for Lamb Weston’s revenues is $1.7 billion, suggesting a decline of 3.5% from the prior-year quarter [1] - The consensus estimate for earnings has decreased to $1.05 per share, indicating a decline of 27.6% from the year-ago quarter [1] - The company has a trailing four-quarter negative earnings surprise of almost 12% on average [1] Group 2: Operational Factors - Lamb Weston is benefiting from a strong pricing environment and positive results from its Restructuring Plan aimed at enhancing efficiency and profitability [3] - The company is modernizing its manufacturing capabilities to optimize operations and expand capacity to meet increasing demand [3] - Despite these efforts, Lamb Weston is facing lower volumes due to customer share losses and reduced restaurant traffic, with a predicted volume decline of 2.3% for the fiscal second quarter [4] Group 3: Earnings Prediction Insights - The current model does not predict an earnings beat for Lamb Weston, as it has a Zacks Rank of 4 (Sell) and an Earnings ESP of -5.71% [5][7] - The combination of a positive Earnings ESP and a Zacks Rank of 1, 2, or 3 typically increases the odds of an earnings beat, which is not applicable in this case [5]

Company Overview - Lamb Weston is a leading global producer and distributor of value-added frozen potato products, supplying restaurants and retailers worldwide [1] - The company ranks No. 1 in North America and No. 2 globally in the frozen potato market, benefiting from increased demand and high gross margins [4] Recent Performance - From FY17 to FY23, Lamb Weston achieved a 9% compound annual growth rate in net sales and a 10% CAGR in adjusted EBITDA, with adjusted gross margins improving by 340 basis points [6] - However, in 2024, prior to Jana Partners' involvement, the company's shares fell over 30%, contrasting with a 20% increase in the S&P 500 [6][7] Financial Challenges - In Q4 2024, Lamb Weston reported a 5% year-over-year decline in net sales and a 40% drop in adjusted EPS to 78 cents, significantly below the expected $1.26 per share [7] - The company attributed its poor performance to market share losses, reduced restaurant traffic due to inflation, and a voluntary product withdrawal [7] Capital Allocation and Operational Issues - Jana Partners has identified capital misallocation, operational blunders, and corporate governance failings as key issues for Lamb Weston [8] - The company has been spending nearly 14% of sales on capital expenditures in 2023, with projections of 12% to 13% for the next two years, raising concerns about the necessity and efficiency of this spending [8] - Lamb Weston has also seen an increase in selling, general, and administrative expenses as a percentage of net sales, which is viewed as suspicious given the revenue growth [8] Strategic Review and Board Changes - Jana Partners, in collaboration with Continental Grain, is seeking to engage with Lamb Weston on various topics, including financial performance, capital spending, and corporate governance [3] - Jana has proposed a slate of experienced industry executives for board positions to address operational and capital allocation issues [9] Potential for Strategic Transactions - There is speculation about a potential transaction involving Post Holdings, which could lead to a takeout offer exceeding $100 per share, contingent on the board's evaluation of shareholder value versus long-term operational plans [10]

Core Viewpoint - Lamb Weston reported a decline in both net sales and earnings for Q1 of fiscal 2025, with management cutting its profit outlook amid a slowdown in demand [2][3][9]. Financial Performance - The company's Q1 earnings per share (EPS) was 73 cents, matching estimates but down 55% year over year [3]. - Net sales reached $1,654.1 million, exceeding the Zacks Consensus Estimate of $1,555.2 million, but fell 1% year over year [4]. - Adjusted gross profit decreased by $137.2 million to $353.1 million, influenced by increased manufacturing costs and a $39 million loss from a product withdrawal [5]. Segment Analysis - North America segment net sales dropped 3% to $1,103.7 million, with a 4% decline in volume attributed to customer share losses and reduced restaurant traffic [6]. - International segment net sales increased 4% to $550.4 million, despite a 1% decline in volume, supported by growth in key markets outside Europe [7]. Financial Health - The company ended the quarter with cash and cash equivalents of $120.8 million and long-term debt of $3,437.3 million [8]. - Net cash from operating activities was $330.2 million, with capital expenditures of $335.6 million [8]. Future Outlook - Lamb Weston reaffirmed its fiscal 2025 net sales target of $6.6 billion to $6.8 billion, expecting growth of approximately 2% to 5% [9]. - Adjusted net income target range was lowered to $600-$615 million, with adjusted EPS revised to $4.15-$4.35 [9]. - The company anticipates an interest expense of around $185 million and an effective tax rate of about 25% for the full year [9]. Estimate Trends - There has been a downward trend in estimates, with the consensus estimate shifting down by 10.85% [10][12]. - Lamb Weston currently holds a Zacks Rank 3 (Hold), indicating expectations for an in-line return in the coming months [12]. Investment Scores - The company has a Growth Score of B and a Value Score of A, resulting in an aggregate VGM Score of B [11].

Group 1 - The focus is on GARP (Growth at Reasonable Price) opportunities within the industrial, consumer, and technology sectors [1] - The article encourages readers to follow for the latest research updates and invites questions through comments or messaging [1] Group 2 - There is a mention of a previous contributor, ABI Invest, who is now contributing under a separate profile [1]