Lamb Weston (LW) provided an upbeat full-year earnings guidance after delivering a fiscal fourth-quarter beat, while the company said disruption from the Middle East conflict weighed on its business in Europe, the Middle East and Africa.
The supplier of frozen potato products anticipates adjusted earnings between $2.95 and $3.25 a share for fiscal 2027, while the current consensus on FactSet is for $2.93. In the previous fiscal year, adjusted EPS dropped 16% annually to $3.01, but topped Wall Street's $2.77 view.
Lamb Weston projects sales to be flat to up 1% for the ongoing fiscal year, compared with a 2% gain in fiscal 2026.
For the three months through May, adjusted EPS fell to $0.87 from $0.92 a year earlier, but topped the average analyst estimate of $0.63. Sales improved to $1.77 billion from $1.68 billion, also exceeding the Street's $1.7 billion consensus.
"We over-delivered on our financial guidance with solid performance in sales and profitability, led by volume growth in North America," Chief Executive Mike Smith said in a statement. Fourth-quarter North American segment sales climbed 9% to $1.21 billion, while international sales dropped 2% to $563.9 million.
"While disruption in the Middle East and input cost inflation have impacted our EMEA business, we have been taking actions to help mitigate this volatility in a challenging competitive environment," Smith said. The company faced shipment disruptions, while market conditions "drove greater competition and pricing pressure, notably in EMEA," Smith said on an earnings call, according to a FactSet transcript.
Lamb Weston shares were down 1.6% in Friday afternoon trade, reducing its year-to-date gains to 15%.
The company incurred higher incremental freight costs due to the Middle East conflict, Chief Financial Officer James Gray told analysts, adding that first-quarter net sales are expected to be flat.
Lamb Weston said it surpassed its $100 million savings milestone for fiscal 2026 and aims to pursue additional opportunities to improve its cost structure and capital efficiency.
Price: $48.91, Change: $-0.27, Percent Change: -0.55%