Lamb Weston Says Cost-Saving Efforts Are Paying Off -- Update
Dow Jones2026/10/06 15:57By Connor Hart Lamb Weston said profit and sales exceeded expectations in the latest quarter, citing strong demand and steps the company has taken to counter rising costs. The quarterly results gave the french fry maker confidence to raise its outlook for the year. Investors rallied behind the report, sending shares 12% higher, to $49.74, on Tuesday. Chief Executive Mike Smith said the company is working to drive additional savings as inflation and freight expenses pressure Lamb Weston's bottom line. "Our cost-savings program remains robust and on track," Smith said on a call with analysts. "These aggressive programs have permanently lowered our cost of operating." To aid its efforts, the company behind McDonald's french fries simplified its organizational structure so it could speed up decision making, executives said. Artificial intelligence has also played a part in improving operations. At the same time, Lamb Weston said it saw strong demand and customer retention, as well as an influx of new customer acquisitions. Fiscal first-quarter net sales ticked up 0.7%, to $1.67 billion, just ahead of Wall Street models for $1.65 billion. Smith said continued momentum in North America drove volume growth and offset weaker international trends, particularly across Europe, the Middle East and Asia, which continue to face challenging market conditions. Sales across North America climbed 5.2% to $1.14 billion, while international sales fell 8% to $528.9 million. Looking ahead, Lamb Weston now expects adjusted earnings of $3.05 to $3.35 a share in its fiscal 2027, up from a prior forecast of $2.95 to $3.25 a share. Sales are now anticipated to be up in the low-single-digit percent range, compared with a previous view of flat to up 1%. Analysts polled by FactSet are looking for adjusted earnings of $3 a share on sales of $6.52 billion, marking a 1.5% decrease from last year. For its three months ended Aug. 30, Lamb Weston posted net income of $29.1 million, or 21 cents a share, down from $64.3 million, or 46 cents a share,
By Connor Hart
Lamb Weston said profit and sales exceeded expectations in the latest quarter, citing strong demand and steps the company has taken to counter rising costs.
The quarterly results gave the french fry maker confidence to raise its outlook for the year. Investors rallied behind the report, sending shares 12% higher, to $49.74, on Tuesday.
Chief Executive Mike Smith said the company is working to drive additional savings as inflation and freight expenses pressure Lamb Weston's bottom line.
"Our cost-savings program remains robust and on track," Smith said on a call with analysts. "These aggressive programs have permanently lowered our cost of operating."
To aid its efforts, the company behind McDonald's french fries simplified its organizational structure so it could speed up decision making, executives said. Artificial intelligence has also played a part in improving operations.
At the same time, Lamb Weston said it saw strong demand and customer retention, as well as an influx of new customer acquisitions.
Fiscal first-quarter net sales ticked up 0.7%, to $1.67 billion, just ahead of Wall Street models for $1.65 billion.
Smith said continued momentum in North America drove volume growth and offset weaker international trends, particularly across Europe, the Middle East and Asia, which continue to face challenging market conditions. Sales across North America climbed 5.2% to $1.14 billion, while international sales fell 8% to $528.9 million.
Looking ahead, Lamb Weston now expects adjusted earnings of $3.05 to $3.35 a share in its fiscal 2027, up from a prior forecast of $2.95 to $3.25 a share.
Sales are now anticipated to be up in the low-single-digit percent range, compared with a previous view of flat to up 1%.
Analysts polled by FactSet are looking for adjusted earnings of $3 a share on sales of $6.52 billion, marking a 1.5% decrease from last year.
For its three months ended Aug. 30, Lamb Weston posted net income of $29.1 million, or 21 cents a share, down from $64.3 million, or 46 cents a share, in last year's comparable period.
Adjusted earnings of 75 cents a share topped analyst expectations for 59 cents a share.
Write to Connor Hart at connor.hart@wsj.com
(END) Dow Jones Newswires
October 06, 2026 11:57 ET (15:57 GMT)
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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