Why Lamb Weston Stock Tanked Today

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]