Will Lamb Weston Stock Bounce Back in 2025 After Recent Slump?

Company Performance - Lamb Weston Holdings, Inc. has seen an 18.5% decline in its share price over the past six months, which is significantly worse than the 2.3% decline in its industry and the 1.5% decline in the broader Zacks Consumer Staple sector [1] - The company's second-quarter fiscal 2025 results fell below expectations, with top and bottom lines declining year over year and missing the Zacks Consensus Estimate [4][10] - The quarterly volume decreased by 6%, attributed to weak global restaurant traffic trends and customer share losses, with North America segment volume falling by 5% and International segment volume dropping by 6% [5] Challenges Faced - Lamb Weston is facing challenges such as declining global restaurant traffic, increased competition, overcapacity in the global market, and rising manufacturing costs [2][3] - The company has experienced incremental customer share losses in both North American and International segments due to a competitive landscape, particularly in the Middle East and parts of Asia Pacific [3] - Increased manufacturing costs per pound have been driven by input cost inflation, particularly higher raw potato prices, inefficiencies, and increased transportation and warehousing costs [8] Financial Outlook - Management has revised its annual net sales target range to $6.35-$6.45 billion, down from the previous range of $6.6 billion to $6.8 billion [10] - Adjusted net income guidance has been lowered to $440-$460 million, with adjusted earnings per share (EPS) revised to $3.05 to $3.20 for fiscal 2025, compared to earlier estimates of $600 million to $615 million and adjusted EPS of $4.15 to $4.35 [10] - The company anticipates that challenging conditions will persist through the remainder of fiscal 2025 and into fiscal 2026, driven by continued softening in global frozen potato demand [9]