Lamb Weston(US:LW)2025-12-19 13:32Financial Performance - Net sales for Q2 2026 were $1,618.1 million, a 1% increase year-over-year, with an 8% volume growth offset by an 8% decline in price/mix [2]. - Income from operations surged to $139.2 million, reflecting a 652% increase compared to the prior year quarter [2]. - Net income reached $62.1 million, a significant increase from a net loss of $36.1 million in the prior year quarter [2]. - Diluted EPS for Q2 2026 was $0.44, compared to a diluted loss per share of $0.25 in the prior year quarter [2]. - Net income for the thirteen weeks ended November 23, 2025, was $62.1 million, compared to a net loss of $36.1 million in the same period last year, marking a significant turnaround [26]. - Earnings per share (EPS) for the thirteen weeks ended November 23, 2025, were $0.45, compared to a loss of $0.25 per share in the prior year [26]. - Net income for the twenty-six weeks ended November 23, 2025, was $126.4 million, an increase of 38.5% compared to $91.3 million for the same period in 2024 [35]. - The total adjustments for the thirteen weeks ended November 23, 2025, amounted to $43.6 million, leading to an adjusted net income of $96.7 million and an adjusted EPS of $0.69 [43]. Sales and Revenue Segments - The North America segment reported net sales of $1,069.5 million, with an 8% increase in volume but an 8% decline in price/mix [7]. - International segment net sales increased by 4% to $548.6 million, with a 7% volume growth driven by Asia [8]. - Segment net sales for North America for the thirteen weeks ended November 23, 2025, were $1,069.5 million, a decrease of 0.1% compared to $1,072.1 million in 2024 [37]. - International segment net sales increased by 4% to $548.6 million for the same period, compared to $528.8 million in 2024 [37]. Guidance and Projections - The company reaffirmed its fiscal 2026 guidance, projecting net sales between $6.35 billion and $6.55 billion [14]. Cash Flow and Capital Expenditures - Net cash provided by operating activities increased by $101.1 million to $530.4 million compared to the prior year [10]. - Capital expenditures for the first half of fiscal 2026 were $155.7 million, down $330.7 million from the prior year period [11]. - Cash flows from operating activities for the twenty-six weeks ended November 23, 2025, were $530.4 million, up from $429.3 million in 2024 [35]. - The company reported a net cash increase of $12.0 million in cash and cash equivalents, ending the period with $82.7 million [35]. Dividends and Shareholder Returns - The board authorized a 3% increase in the quarterly dividend to $0.38 per share, payable on February 27, 2026 [13]. - The company declared dividends of $0.37 per common share for the thirteen weeks ended November 23, 2025, slightly up from $0.36 in the same period last year [26]. - The company repurchased common stock totaling $59.1 million during the period, compared to $92.8 million in the previous year [35]. Expenses and Charges - The restructuring expense for the thirteen weeks ended November 23, 2025, was $14.1 million, significantly lower than $74.6 million in the same period of 2024 [26]. - The company incurred total pre-tax cash charges of $46.0 million related to the Cost Savings Program and Restructuring Plan for the twenty-six weeks ended November 23, 2025 [27]. - The company incurred $46.4 million in restructuring expenses during the twenty-six weeks ended November 23, 2025, impacting overall profitability [44]. - Stock-based compensation expenses for the thirteen weeks ended November 23, 2025, were $9.5 million, compared to $12.3 million in the same period of 2024 [49]. Assets and Liabilities - Total current assets decreased slightly to $2,011.0 million from $2,032.7 million, with cash and cash equivalents increasing to $82.7 million from $70.7 million [33]. - Total liabilities decreased to $5,577.6 million from $5,654.9 million, with long-term debt remaining relatively stable at $3,648.9 million [33]. - The total stockholders' equity increased to $1,754.4 million from $1,737.7 million, reflecting a positive trend in retained earnings [33]. Other Financial Metrics - Gross profit for the thirteen weeks ended November 23, 2025, was $324.3 million, up from $277.8 million in the prior year, reflecting a 16.7% increase [26]. - Adjusted EBITDA for North America increased by 7% to $287.8 million, while the international segment saw a significant decline of 44% to $27.2 million [37]. - Adjusted EBITDA for the twenty-six weeks ended November 23, 2025, was $587.8 million, slightly down from $593.6 million in the same period of 2024 [48]. - The company achieved a gross profit of $666.7 million for the twenty-six weeks ended November 23, 2025, representing an increase from $633.8 million in the prior year [44]. Foreign Currency and Derivative Losses - The company experienced foreign currency exchange losses of $6.8 million for the thirteen weeks ended November 23, 2025, compared to $9.6 million in the same period last year [31]. - Foreign currency exchange losses for the twenty-six weeks ended November 23, 2025, were $2.1 million, a decrease from $10.2 million in the same period of 2024 [49]. - The company experienced unrealized derivative losses of $12.1 million for the thirteen weeks ended November 23, 2025, compared to gains of $3.0 million in the same period of 2024 [49]. Corporate Structure and Investments - Lamb Weston holds a 50 percent equity interest in the U.S. potato processing joint venture, Lamb Weston RDO [50]. - Depreciation and amortization related to equity method investments was $2.2 million for the thirteen weeks ended November 23, 2025, compared to $2.0 million for the same period in 2024 [51]. - For the twenty-six weeks ended November 23, 2025, depreciation and amortization related to equity method investments was $4.4 million, up from $4.1 million in 2024 [51]. - Unallocated corporate costs include expenses related to administrative, IT, HR, finance, and accounting functions not specifically allocated to operating segments [52]. - The reconciliation of net income to Adjusted EBITDA includes adjustments for unrealized derivative gains and losses, foreign currency exchange gains and losses, and stock-based compensation [52].