Lamb Weston(US:LW)2025-09-30 17:03Financial Performance - For the first quarter of fiscal 2026, net sales increased by $5.2 million to $1,659.3 million, with a favorable foreign currency impact of $23.7 million[82]. - North America segment net sales declined by $19.1 million, or 2%, to $1,084.6 million, despite a 5% increase in volume[83]. - International segment net sales increased by $24.3 million, or 4%, to $574.7 million, with a 6% increase in volume driven by growth in Asia[84]. - Gross profit decreased by $13.6 million to $342.4 million, primarily due to unfavorable price/mix, partially offset by higher sales volumes and lower manufacturing costs[85]. - Adjusted EBITDA increased by $2.8 million to $302.2 million, despite lower adjusted gross profit and equity method investment earnings[87]. - Net income declined by $63.1 million to $64.3 million compared to the prior year quarter[87]. - Adjusted EBITDA for the thirteen weeks ended August 24, 2025, was $302.2 million, compared to $299.4 million for the same period in 2024[105]. - Net sales for Q1 fiscal 2026 were $1,659.3 million, with North America contributing $1,084.6 million and International sales at $574.7 million[110]. Cash Flow and Investments - Operating cash flow increased to $352.0 million from $330.2 million in the prior year quarter[95]. - In Q1 fiscal 2026, cash provided by operating activities increased by $21.8 million to $352.0 million, primarily due to $18.7 million in favorable changes in working capital[96]. - Investing activities used $76.3 million in Q1 fiscal 2026, a significant decrease from $335.6 million in Q1 fiscal 2025, with expenditures focused on expanding french fry capacity in Argentina[97]. - Net payments of $161.9 million were made under revolving credit facilities in Q1 fiscal 2026, alongside $18.7 million used to repurchase 187,259 shares at an average price of $55.34 per share[98]. - The company paid $51.7 million in cash dividends to common stockholders during Q1 fiscal 2026, consistent with the previous year[98]. Future Outlook - The company anticipates earnings will decline due to pricing pressures, higher input costs, and increased compensation expenses[79]. - The company expects global restaurant traffic to remain in line with fiscal 2025 levels, with continued prioritization of french fries by consumers[78]. Operational Developments - The company completed its expansion of french fry capacity in Argentina in Q1 fiscal 2026, following previous expansions in the U.S. and Netherlands[97]. - The company reported a pension settlement charge of $13.1 million in Q1 fiscal 2026, aimed at fully funding its defined benefit pension plan[106]. - There were no material changes to the contractual obligations or off-balance sheet arrangements during the reporting period[101][111]. - The company remains in compliance with financial covenant ratios and other covenants in its debt agreements as of August 24, 2025[100].