North America gains offset 8% international sales decline
Lamb Weston, the french-fry supplier, on Tuesday reported fiscal first-quarter net income of $29.1 million, or 21 cents a share, for the quarter ended Aug. 30, down from $64.3 million, or 46 cents a share, in last year’s comparable period. Stripping out certain one-time items, adjusted earnings came in at 75 cents a share, ahead of analyst expectations of 59 cents a share, according to FactSet.
Sales ticked up 0.7% to $1.67 billion, just topping the $1.65 billion Wall Street expected. The result reflected a split geographic picture: North America sales rose 5.2% to $1.14 billion on higher demand from existing customers and new customer acquisitions, while international sales fell 8% to $528.9 million, hurt by lower volumes and prices.
Chief Executive Mike Smith attributed the divergence to continued momentum in North America, which drove volume growth and offset weaker international trends. Smith singled out Europe, the Middle East and Asia as markets that continue to face challenging conditions.
The company is working to drive additional cost savings as it continues to experience unexpected inflationary pressures across key input costs and freight expenses, Smith said.
Looking ahead, Lamb Weston raised its fiscal 2027 outlook. The company now expects adjusted earnings of $3.05 to $3.35 a share, up from a prior forecast of $2.95 to $3.25. Sales are now anticipated to rise 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 in fiscal 2027, which would mark a 1.5% decrease from last year.
Lamb Weston did not detail in Tuesday’s release which specific input categories have been most affected by inflation, or quantify the cost-savings effort.