Lamb Weston(LW) - 2025 Q3 - Quarterly Results

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$248.7 million, while net income remained flat at $146.0 million[4] - Adjusted EBITDA increased by 6$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$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$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$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]