Shares of Lamb Weston Holdings, Inc. (NYSE: LW) stayed purple 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 have 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 yr 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, web 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 atmosphere as menu value inflation has led to softness in international restaurant site visitors and frozen potato demand. This has led to a rise in out there capability in North America and Europe. This supply-demand imbalance is predicted to proceed by means of probably the most a part of fiscal yr 2025.
Lamb Weston’s quantity fell 8% in This autumn 2024, primarily as a result of market share losses, the exit from sure lower-price and lower-margin enterprise in Europe, mushy restaurant site 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 atmosphere to stay pressured in fiscal yr 2025 by financial headwinds. The corporate anticipates volumes to say no in the course of the first half of the yr as a result of continued impacts from share losses and softness in restaurant site visitors as customers modify to greater menu costs.
The French fry-maker expects volumes to choose up within the second half of the yr because it laps the impacts of the ERP transition and voluntary product withdrawal from final yr. Quantity enchancment is predicted 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, mushy restaurant site visitors, and the voluntary product withdrawal. The primary quarter is predicted to document the best affect from share losses and mushy site visitors, after which it is going to start to ease going by means of the remainder of the yr.
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 value and commerce help in North America. Margins in Q1 are anticipated to be pressured by greater price per pound, unfavorable combine, and investments in value and commerce help.
