What to search for when Lamb Weston (LW) studies its Q3 2025 earnings outcomes

Shares of Lamb Weston Holdings, Inc. (NYSE: LW) stayed inexperienced on Friday. The inventory has dropped 19% over the previous three months. The French fry big is slated to report its third quarter 2025 earnings outcomes on Thursday, April 3, earlier than the market opens. Right here’s a have a look at what to anticipate from the earnings report:

Income

Analysts are projecting income of $1.5 billion for Lamb Weston in Q3 2025, which signifies a progress of over 2% from the identical interval a 12 months in the past. In Q2 2025, web gross sales declined 8% year-over-year to $1.6 billion.

Earnings

The consensus goal for Q3 2025 earnings per share is $0.87, which suggests a decline of 27% from the year-ago interval. In Q2 2025, adjusted EPS decreased 54% YoY to $0.66.

Factors to notice

Lamb Weston has been going through a difficult working setting marked by softness in demand for frozen potato merchandise and capability expansions by rivals. The corporate expects these headwinds to persist by fiscal 12 months 2025 and into fiscal 12 months 2026, which led it to decrease its steerage for full-year 2025. These components could have impacted the Q3 efficiency.

The potato merchandise maker’s efficiency within the second quarter of 2025 got here under its expectations resulting from increased manufacturing prices and softer volumes. Volumes in Q2 fell 6%, impacted by a drop in restaurant visitors within the US and lots of key worldwide markets, in addition to buyer share losses resulting from heavy competitors. Volumes have been additionally impacted by the exiting of sure low-price, low-margin enterprise within the Europe, Center East, and Africa area however this headwind just isn’t anticipated to proceed within the third quarter.

Though restaurant visitors within the US is being buoyed by increased promotional exercise by fast service eating places (QSRs), there was a downsizing in serving sizes of French fries, which pose headwinds to volumes.

LW anticipates quantity pressures in North America through the second half of the 12 months from the lack of a series restaurant buyer, and a larger-than-expected impression from the reductions in serving sizes. Worldwide volumes are anticipated to be impacted by buyer share losses resulting from heavy competitors, and mushy restaurant visitors. These pressures are anticipated to be offset by some new buyer wins and the regaining of share of some misplaced prospects. The corporate has forecast gross sales of $3.1-3.2 billion for the second half of the 12 months, representing progress of 1-4% YoY. These advantages could have aided the third quarter outcomes.

Lamb Weston might also see advantages from value financial savings generated by its restructuring plan. As a part of its restructuring efforts, the corporate in the reduction of manufacturing throughout sure strains, lowered headcount and decreased sure different bills.