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Lamb Weston Holdings, Inc. (NYSE: LW) has reported a robust performance for the third quarter of fiscal 2025, with net sales rising by 4% year-over-year to $1.52 billion. This increase was driven by a 9% growth in volume, as the company successfully regained volumes lost during the previous year’s transition to a new ERP system. Income from operations saw a significant increase of 11% to $249 million, while net income remained stable at $146 million.
The company’s diluted earnings per share (EPS) rose by $0.02 to $1.03. In terms of non-GAAP results, adjusted income from operations increased slightly by $1 million to $263 million. However, adjusted net income saw a decline of 11% to $157 million, and adjusted diluted EPS decreased by 8% to $1.10. The adjusted EBITDA rose by 6% to $364 million, highlighting the company’s ability to maintain operational efficiency despite external challenges.
The company also returned $151 million to shareholders through dividends and share repurchases. The North America segment contributed significantly to the quarter’s performance, with net sales climbing by 4% to $986.3 million. Volume in this segment increased by 8%, offsetting a 4% decline in price/mix due to strategic pricing investments. The International segment also showed positive results, with a 5% increase in net sales to $534.2 million, driven by a 12% rise in volume despite a challenging market environment.
Lamb Weston Delivers Double Beat with Q3 FY’25 Results
Lamb Weston’s third-quarter performance exceeded expectations, with actual EPS of $1.03 surpassing the anticipated $0.89. The company also achieved revenue of $1.52 billion, slightly above the expected $1.5 billion. These results indicate a stronger-than-expected recovery in volume and operational efficiency, particularly in the North America and International segments.
The company’s strategic initiatives, including operational efficiencies and cost-saving measures, have played a crucial role in surpassing expectations. Despite a competitive pricing environment, Lamb Weston’s ability to secure customer contract wins and replace lost volumes from the ERP transition has contributed to its robust performance. The adjusted EBITDA of $364 million also reflects the company’s effective management of operational costs.
While adjusted net income and adjusted diluted EPS fell short of the previous year’s figures, the overall performance remains commendable given the external pressures from soft restaurant traffic and competitive pricing dynamics. The company’s focus on cost efficiencies and strategic investments has allowed it to maintain a strong financial position and deliver value to shareholders.
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Lamb Weston Reaffirms Fiscal 2025 Outlook
Lamb Weston has reaffirmed its fiscal 2025 outlook, projecting net sales between $6.35 billion and $6.45 billion. The company also maintains its adjusted EBITDA target of $1.17 billion to $1.21 billion, along with an adjusted net income range of $440 million to $460 million. The adjusted diluted EPS is expected to be between $3.05 and $3.20.
In addition to its financial targets, Lamb Weston plans to continue its focus on reducing capital spending. The company aims to cut capital expenditures by $250 million this year compared to the previous fiscal year, with an additional $200 million reduction anticipated in fiscal 2026. These reductions are part of the company’s broader strategy to complete growth-related investments and enhance shareholder value.
Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.
About the author
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird’s US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
