Financial Data and Key Metrics Changes - In Q1, the company experienced an organic sales decline of approximately 3%, with underlying performance showing a negative 1% when excluding ERP impacts and out-of-stock issues [27][32] - The company expects organic sales growth in the front half of the fiscal year to be negative, low single digits, while the back half is anticipated to be positive, low single digits [9][10] - The company refined its estimates for ERP-related sales headwinds from a range of 7-8 percentage points to a point estimate of 7.5 percentage points [72] Business Line Data and Key Metrics Changes - The company launched a new ERP system in the U.S., which is expected to strengthen operations and unlock new value streams [5] - Innovations are planned across major brands, including new products in Glad and Brita, aimed at capturing consumer interest and addressing market challenges [38][39] - The trash bags and cat litter categories are facing increased promotional activity and competitive pressure, impacting market share [41][42] Market Data and Key Metrics Changes - The U.S. retail category is expected to grow at a muted rate of 0-1%, below historical averages, with improvements anticipated in the back half of the year [9][10] - The company is observing a stable consumer wallet, but significant changes in spending behavior are noted, leading to a more competitive environment [16][17] - The company is monitoring private label competition closely, particularly in categories like Brita and bleach, where some consumers are trading down [65][66] Company Strategy and Development Direction - The company is focused on demand creation plans to deliver superior value to consumers and reinvigorate category growth [5] - There is a strong emphasis on innovation across all major brands, with plans to launch new products that address consumer needs and preferences [39] - The company maintains a long-term focus on strengthening its core brands while exploring portfolio adjustments to enhance shareholder value [53][55] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to navigate the current competitive landscape and deliver expected performance despite challenges [96] - The company is optimistic about the benefits of the new ERP system, which is expected to enhance operational efficiency and consumer value [84] - Management is closely watching consumer behavior and market dynamics, indicating a readiness to adapt strategies as needed [81] Other Important Information - The company has seen a slight improvement in commodity costs, leading to a more favorable outlook for input costs and inflation [21][22] - Promotional spending has increased in certain categories, but overall promotional activity remains rational [17] Q&A Session Summary Question: Can you provide insights on organic sales growth expectations for the second quarter and the rest of the year? - Management indicated that organic sales growth in the front half would be negative, low single digits, while the back half is expected to show positive growth driven by innovation and improved market share [9][10] Question: How is the competitive environment affecting promotions and pricing strategies? - Management noted increased promotions in certain categories, with a generally rational competitive environment, while also emphasizing the need to balance short-term share loss with long-term value creation [16][17] Question: What is the company's outlook on gross margins and cost pressures? - Management expects gross margins to expand in the back half of the year, despite some operational challenges and increased trade spending [23][24] Question: How is the company addressing market share challenges in key categories? - Management acknowledged a decline in market share due to ERP implementation but expressed confidence in plans to regain share through innovation and targeted spending [32][33] Question: Can you elaborate on the company's innovation plans for the second half of the year? - Management highlighted ongoing innovations across major brands, including new product launches in Glad and Brita, aimed at capturing consumer interest and addressing competitive pressures [38][39]

Financial Data and Key Metrics Changes - In Q1, the company experienced organic sales growth decline of about 3 points, with underlying performance at approximately -1 when excluding ERP impacts [27][28] - The company expects organic sales growth in the front half of the year to be negative, low single digits, while the back half is anticipated to be positive, low single digits [9][10] - The company refined its estimates for ERP transition impacts from a range of 7-8 points of negative sales headwind to a point estimate of 7.5 points [72] Business Line Data and Key Metrics Changes - The company launched a new ERP system in the U.S., which has strengthened its digital backbone and unlocked new value streams [5] - Innovations are planned across major brands, including new products in Glad and Brita, aimed at capturing consumer interest and addressing market needs [38][39] - The trash and cat litter categories are facing increased promotional activity and competitive pressure, impacting market share [41][42] Market Data and Key Metrics Changes - The U.S. retail category is expected to grow at a muted rate of 0%-1%, below historical averages, with improvements anticipated in the back half of the year [9][10] - The company is observing a generally rational competitive environment, although promotional spending has increased in certain categories [16][17] - The company has seen stable household penetration for its major brands, with Clorox brand penetration increasing significantly [33] Company Strategy and Development Direction - The company is focused on demand creation plans to deliver superior value to consumers and reinvigorate category growth [5] - There is a long-term focus on strengthening core brands and ensuring better value offerings to consumers [53][54] - The company is actively reviewing its portfolio for potential divestitures and acquisitions to enhance shareholder value [55][56] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the stress consumers are under, leading to cautious and value-seeking shopping behaviors [16] - The company is optimistic about the back half of the year, driven by innovation and improved execution plans [80][81] - Management is closely monitoring consumer behavior and market dynamics to adjust strategies accordingly [81] Other Important Information - The company expects robust gross margin expansion in Q3 and Q4, despite facing some operational challenges in Q1 due to ERP implementation [23] - Input costs and inflation are projected to increase by about $70 million for the year, which is more favorable than previous estimates [21][22] Q&A Session Summary Question: Insights on organic sales cadence and category growth - Management indicated that organic sales growth in the front half would be negative, while the back half is expected to show improvement driven by innovation and market share recovery [9][10] Question: Competitive environment and promotional activity - Management noted increased promotions in certain categories but described the overall competitive environment as rational [16][17] Question: Impact of ERP on market share - The company experienced a loss in market share due to ERP implementation challenges but is focused on regaining share through refined plans and innovations [32] Question: Future portfolio actions - Management emphasized a long-term focus on strengthening core brands while remaining open to portfolio adjustments as needed [53][54] Question: Inventory trends and destocking - The company is not currently experiencing material destocking and has largely rebuilt inventories post-ERP implementation [60] Question: Price mix and competitive pressures - Management acknowledged ongoing headwinds from value-seeking behavior and channel shifting, with expectations for price mix to remain negative but improving [91]

Core Viewpoint - Bragar Eagel & Squire, P.C. is investigating potential claims against Lamb Weston Holdings, Inc. due to a class action complaint alleging breaches of fiduciary duties by the board of directors during the implementation of a new ERP system [1] Company Overview - Lamb Weston is the largest producer of frozen potato products in North America and the second largest globally, supplying products to restaurants and retailers, including major customer McDonald's [2] ERP System Implementation - On July 25, 2023, Lamb Weston announced the completion of the design phase for a new Enterprise Resource Planning (ERP) software system aimed at integrating key business operations [3] - The new ERP system was intended to replace outdated financial and operational systems, which had suffered from years of under-investment in information technology [3] Allegations and Financial Impact - The class action complaint alleges that Lamb Weston made material misrepresentations regarding the ERP system's design and implementation, claiming it strengthened operational infrastructure while downplaying issues as "usual bumps" [4] - On April 4, 2024, Lamb Weston reported significant problems with the ERP transition, resulting in over $130 million in lost sales during the third quarter and a substantial reduction in sales guidance for the fiscal year [5] - The ERP rollout negatively impacted net sales by $135 million, net income by $72 million, and adjusted EBITDA by $95 million, leading to a stock price decline of over 19% [5]