Shares of Lamb Weston Holdings, Inc. (NYSE: LW) stayed crimson on Friday. The inventory has dropped 21% over the previous three months. The frozen potato merchandise provider is slated to report its first quarter 2025 earnings outcomes on Tuesday, October 1, after markets shut. Right here’s a take a look at what to anticipate from the earnings report:
Income
Lamb Weston forecasts gross sales for the primary quarter of 2025 to be down mid-to-high single digits in comparison with the identical interval a 12 months in the past. Analysts are estimating gross sales of $1.56 billion for the quarter, which compares to gross sales of $1.66 billion reported within the year-ago interval. Within the fourth quarter of 2024, internet gross sales declined 5% year-over-year to $1.61 billion.
Earnings
The consensus estimate for EPS in Q1 2025 is $0.71. This compares to adjusted EPS of $1.63 reported in Q1 2024. In This autumn 2024, adjusted EPS fell 40% YoY to $0.78.
Factors to notice
Lamb Weston has been navigating a difficult setting as menu worth inflation has led to softness in international restaurant visitors and frozen potato demand. This has led to a rise in obtainable capability in North America and Europe. This supply-demand imbalance is anticipated to proceed via essentially the most a part of fiscal 12 months 2025.
Lamb Weston’s quantity fell 8% in This autumn 2024, primarily attributable to market share losses, the exit from sure lower-price and lower-margin enterprise in Europe, gentle restaurant visitors developments in North America and key worldwide markets, and a voluntary product withdrawal. Gross sales and volumes declined throughout the North America and Worldwide segments as properly.
LW expects the working setting to stay pressured in fiscal 12 months 2025 by financial headwinds. The corporate anticipates volumes to say no in the course of the first half of the 12 months attributable to continued impacts from share losses and softness in restaurant visitors as shoppers alter to larger menu costs.
The French fry-maker expects volumes to select up within the second half of the 12 months because it laps the impacts of the ERP transition and voluntary product withdrawal from final 12 months. Quantity enchancment is anticipated to be supported by buyer contract wins within the US and worldwide markets, and the regaining of some misplaced market share.
In Q1 2025, Lamb Weston expects quantity to be down mid-single digits, impacted by share losses, gentle restaurant visitors, and the voluntary product withdrawal. The primary quarter is anticipated to document the very best affect from share losses and gentle visitors, after which it’s going to start to ease going via the remainder of the 12 months.
Worth/combine is anticipated to be down low-to-mid-single digits because the profit from pricing is offset by the affect of unfavorable combine and focused investments in worth and commerce assist in North America. Margins in Q1 are anticipated to be pressured by larger price per pound, unfavorable combine, and investments in worth and commerce assist.
