Lamb Weston's Q2 Earnings Beat Estimates, Sales Rise Y/Y

Core Insights - Lamb Weston Holdings, Inc. reported solid second-quarter fiscal 2026 results, with both net sales and earnings exceeding the Zacks Consensus Estimate, although earnings decreased compared to the previous year [2][10] Financial Performance - Adjusted earnings were 69 cents per share, surpassing the Zacks Consensus Estimate of 67 cents, but represented a 5% decrease year-over-year due to reduced adjusted gross profit [2][10] - Net sales reached $1,618.1 million, exceeding the Zacks Consensus Estimate of $1,593 million, and increased by $17.2 million year-over-year [3][10] Sales and Volume Analysis - On a constant-currency basis, sales were flat, with an 8% volume growth offset by an 8% decline in price/mix, driven by customer wins and share gains, particularly in North America and Asia [4] - The North America segment's net sales were flat at $1,069.5 million, with an 8% volume increase driven by customer contract wins, while the price/mix fell 8% [7] - The International segment's net sales grew 4% to $548.6 million, with a 7% volume increase, but a decline in price/mix by 8% [9] Profitability Metrics - Adjusted gross profit fell by $15.6 million year-over-year to $327.9 million, primarily due to weaker price/mix [5] - Adjusted EBITDA decreased by $8.5 million year-over-year to $285.7 million, attributed to reduced adjusted gross profit and equity method investment earnings [6] Segment Performance - North America segment adjusted EBITDA increased by $18.6 million to $287.8 million, driven by higher volumes and reduced manufacturing costs [8] - International segment adjusted EBITDA decreased by $21.4 million to $27.2 million, mainly due to elevated manufacturing costs [11] Financial Health - The company ended the quarter with cash and cash equivalents of $82.7 million and long-term debt of $3,648.9 million [12] - Lamb Weston returned $51.6 million to shareholders through dividends and repurchased $39.6 million of common stock [13] Future Outlook - The company expects net sales at constant currency to be between $6.35 billion and $6.55 billion and adjusted EBITDA to be between $1.00 billion and $1.20 billion for fiscal 2026 [15]