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Key Takeaways
- Lamb Weston’s profit soared as the potato processor benefited from higher prices.
- Net income and earnings per share more than doubled in the quarter from a year ago, and sales were up 48%.
- The company raised its full-year outlook for revenue and earnings per share.
Lamb Weston Holdings (LW) was the best-performing stock in the S&P 500 on Thursday after the food processor posted a big jump in profits and boosted its outlook as it benefited from higher prices.
The maker of frozen french fries and other potato products reported fiscal 2024 first quarter net income soared 111% year-over-year to $240 million. Earnings per share (EPS) jumped 109% to $1.63, and revenue rose 48% to $1.67 billion. Both beat analysts’ estimates.
CEO Tom Werner credited the gains to “the carryover benefit of pricing actions initiated last year as well as improved customer and product mix.”
The company indicated it had a price/mix gain of 23%, reflecting the advantages of increased prices, the timing of trade spending in North America, and a favorable mix.
Lamb Weston now anticipates full-year sales of between $6.8 billion and $7 billion, up from its previous forecast of $6.7 billion to $6.9 billion. It expects EPS of $5.47 to $5.92 versus its earlier guidance of $4.95 to $5.40.
Shares of Lamb Weston Holdings jumped 8% following the news. They had been steadily declining since hitting an all-time high in July.
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