Oct 6, 2026, 8:02 AM ETConsumer Defensive

Lamb Weston — Q1 Fiscal 2027 Earnings Summary

LWLAMB WESTON HOLDINGS INC

Financial Performance

Net sales increased 1% year-over-year to $1.67 billion, driven by a 2% increase in sales volume and an immaterial favorable currency impact, partially offset by a 2% decrease in price/mix.
Net income decreased 55% to $29 million compared to $64 million in the prior year period.
Adjusted net income remained flat at $103 million year-over-year.
Adjusted EBITDA decreased 5% to $286 million from $302 million in the prior year period.
Reported diluted EPS was $0.21, down from $0.46; adjusted diluted EPS increased 1% to $0.75 from $0.74.
Operating cash flow was $235 million, a decrease of $117 million from the prior year, impacted by a $136 million improvement in inventories in the prior year and a $35 million decline in reported net income.
Capital expenditures were $91 million, up $12 million from the prior year period.
Cash and cash equivalents totaled $166 million as of August 30, 2026, an increase of $98 million from the end of fiscal 2026.
Total debt (short-term borrowings plus current and long-term debt obligations) stood at approximately $3.93 billion ($279.3 million short-term, $70.8 million current portion of long-term debt, and $3.58 billion long-term debt).
The company had $1.24 billion of additional available liquidity under its revolving credit facility.

Full-year adjusted EBITDA outlook was raised to $1.125 billion to $1.215 billion from the previous range of $1.10 billion to $1.20 billion.
Full-year adjusted diluted EPS outlook was raised to $3.05 to $3.35 from $2.95 to $3.25.
Full-year net sales outlook was updated to "up low single digits" from 0.0% to 1.0%.
Adjusted income from operations outlook was updated to $730 million to $810 million.
Interest expense, net, outlook was updated to approximately $185 million to $190 million.
Adjusted effective tax rate outlook was updated to approximately 25.0% to 27.0%.
Net cash provided by operating activities outlook remains $750 million to $800 million.
Capital expenditures outlook remains $380 million to $410 million (estimated cash outflows); accrual basis is expected to be $330 million to $350 million.
Diluted outstanding common shares are expected to be in the range of 137.5 million to 139.0 million.
Management expects to complete the "Focus to Win" prioritization work in the coming months and will share the long-term shareholder value roadmap at an Investor Day in early calendar 2027.

North America: Net sales increased 5% to $1.141 billion, driven by a 7% increase in sales volume (the seventh consecutive quarter of growth) and a 2% decline in price/mix. Segment adjusted EBITDA increased 11% to $287 million, supported by higher sales volumes, cost savings initiatives, $5 million in tariff refunds, and increased equity method investment earnings.
International: Net sales declined 8% to $529 million, with a 6% decrease in sales volume and a 2% decrease in price/mix. Segment adjusted EBITDA declined 54% to $27 million, impacted by lower sales volume, lower net sales (mostly in Europe), higher manufacturing costs per pound due to prior year potato cost carry-in, factory underutilization, and inflation.
Management noted the completion of production at Broekhuizenvorst and the successful transition of customer fulfillment within the network to enable further cost optimization in the International segment.
Capacity optimization initiatives in North America have led to an approximate 10 percentage point increase in utilization.

The company continues to experience unexpected inflationary pressure across key input costs and freight expense.
The International segment, particularly EMEA, faces challenging market conditions.
North America sales volume growth was driven by higher demand from existing customers and customer wins.
Price/mix declines in North America resulted from price and trade support for customers and a mix shift toward faster-growing chain customers and private-label products.

Inflationary pressures on input costs and freight expenses are impacting margins.
International markets, specifically EMEA, face challenging conditions and lower sales volumes.
Higher manufacturing costs per pound in the International segment due to prior year potato cost carry-in and factory underutilization.
Forward-looking statements are subject to risks including consumer preferences, economic conditions, tariffs, raw material availability, operational challenges, and geopolitical conflicts.

CEO Mike Smith described the start to the year as "solid," noting that first-quarter net sales and profit were delivered above expectations.
Management highlighted continued momentum in North America fueled by strong customer relationships and cost savings.
Management acknowledged the challenging conditions in EMEA but noted sequential improvement in Segment Adjusted EBITDA as prior year crop carry-in costs were worked through.
The tone reflects confidence in cost savings initiatives and capacity optimization, with management stating these efforts will enable overdelivering on forecasted savings.

The company returned $52 million to shareholders through cash dividends in the first quarter of fiscal 2027.
No shares were repurchased during the first quarter of fiscal 2027; approximately $245 million remains authorized and available under the share repurchase program.
The Board of Directors declared a quarterly dividend of $0.38 per share on October 5, 2026, payable on December 4, 2026, to shareholders of record as of November 6, 2026.
Selling, general, and administrative expenses increased primarily due to lapping $7 million of non-recurring miscellaneous income in the first quarter of fiscal 2026.
The company holds a 50 percent equity interest in a U.S. potato processing joint venture, Lamb-Weston/RDO Frozen.