Lamb Weston Reports First Quarter Fiscal 2026 Results; Reaffirms Fiscal Year 2026 Outlook

About this update from Lamb Weston Holdings, Inc.

EAGLE, Idaho, September 30, 2025 --( BUSINESS WIRE )--Lamb Weston Holdings, Inc. (NYSE: LW) announced today its results for the first quarter of fiscal 2026 and reaffirmed its full year financial targets for fiscal 2026. "The Lamb Weston team delivered a strong start to the fiscal year with solid volume growth and positive customer momentum, underscoring the strength of our value proposition and our operating model," said Mike Smith, Lamb Weston president and CEO. "We believe our sharpened executional focus and strategic plans behind our Focus to Win strategy are beginning to deliver and position us to drive long-term growth and sustainable value for our shareholders." Q1 2026 Commentary Q1 Results of Operations Net sales increased $5.2 million, to $1,659.3 million versus the prior year quarter, including a favorable foreign currency impact of $23.7 million. Net sales at constant currency (2) declined 1 percent, as a 6 percent increase in volume was more than offset by a 7 percent decline in price/mix. Volume growth was driven by customer wins and retention, particularly in North America and Asia, as well as lapping an approximately $15 million charge in the prior year quarter related to a voluntary product withdrawal. Price/mix was in line with the Company's expectations and reflects the carryover impact of fiscal 2025 price and trade investments to support customers, ongoing price and trade support, and unfavorable channel product mix within the Company's segments. Gross profit declined $13.6 million versus the prior year quarter to $342.4 million. Adjusted Gross Profit (1) declined $14.2 million versus the prior year quarter to $338.9 million due primarily to unfavorable price/mix. Unfavorable price/mix was partially offset by higher sales volumes, lower manufacturing costs per pound driven by cost savings initiatives, and the benefit of lapping an approximately $39 million charge in the prior year related to a voluntary product withdrawal. Selling, general and administrative expenses ("SG&A") increased $9.7 million versus the prior year quarter to $153.6 million. Adjusted SG&A (1) declined $24.0 million versus the prior year quarter to $132.4 million, reflecting the benefits of ongoing cost savings initiatives and $7.3 million of miscellaneous income primarily from an insurance recovery and property tax refunds. Net income declined $63.1 million from the prior year quarter to $64.3 million. Diluted EPS declined $0.42 versus the prior year quarter to $0.46. Adjusted Net Income (1) declined $9.7 million year-over-year to $103.0 million, and Adjusted Diluted EPS (1) declined $0.04 from the prior year quarter to $0.74. The decrease in Adjusted Net Income (1) and Adjusted Diluted EPS (1) largely reflect a higher effective tax rate and lower Equity Method Investment Earnings as described below, partially offset by higher Adjusted Income from Operations (1) . Adjusted EBITDA (1) increased $2.8 million from the prior year quarter to $302.2 million. Lower Adjusted SG&A (1) was partially offset by lower Adjusted Gross Profit (1) and Equity Method Investment Earnings (Loss). The Company’s effective tax rate (3) in the first quarter of 2026 was 42.7 percent, versus 28.5 percent in the first quarter of fiscal 2025. The results in both periods reflect the impact of items outlined in the Reconciliations of Non-GAAP Financial Measures in the tables accompanying this press release. In the first quarter of fiscal 2026, the Company also recorded $10.2 million of discrete tax expense, primarily related to the establishment of a non-cash full valuation allowance against certain international deferred tax assets. Excluding these items, the Company’s effective tax rate (3) was 30.2 percent in the first quarter of 2026, versus 30.8 percent in the prior year quarter. Q1 2026 Segment Highlights North America Summary Net sales for the North America segment, which includes all sales to customers in the U.S., Canada and Mexico, declined 2 percent, or $19.1 million, to $1,084.6 million versus the prior year quarter. Volume increased 5 percent compared to the prior year quarter supported by recent customer contract wins and growth across channels. Price/mix declined 7 percent driven by the carryover impact from fiscal 2025 price investments, the ongoing support of customers through price and trade and an unfavorable channel mix. North America Segment Adjusted EBITDA decreased $18.0 million to $260.0 million compared to the prior year quarter. The decline primarily reflects price and trade in support of customers, partially offset by higher sales volumes, lower manufacturing costs per pound and Adjusted SG&A (1) , which included the benefit of cost savings initiatives. Results also benefited from lapping an approximately $21 million charge related to a voluntary product withdrawal in the prior year. International Summary Net sales for the International segment, which includes all sales to customers outside of North America, increased 4 percent, or $24.3 million, to $574.7 million year-over-year, including a favorable $24.5 million from foreign currency translation. Net sales at constant currency (2) was flat. Volume increased 6 percent, led primarily by growth in Asia and with multinational chain customers. Price/mix at constant currency (2) declined 6 percent, driven by investments to support customers as well as ongoing price and trade support. International Segment Adjusted EBITDA increased $5.8 million to $57.2 million year-over-year, reflecting higher sales volumes and lower manufacturing costs per pound. The improvement primarily reflects lapping an approximately $18 million charge related to the prior year’s voluntary product withdrawal, lower potato prices and benefits from ongoing cost savings initiatives. These benefits were partially offset by $3.5 million in start-up costs associated with the new manufacturing facility in Argentina, which is expected to support future growth. Equity Method Investment Earnings (Loss) Equity method investment earnings (loss) from unconsolidated joint ventures were a loss of $0.6 million and earnings of $11.3 million for the first quarter of fiscal 2026 and 2025, respectively. The decline in earnings was primarily the result of lower net sales and an unfavorable mix of sales. The results for the current and prior-year quarters reflect earnings associated with the Company’s 50 percent interest in Lamb Weston/RDO Frozen, an unconsolidated potato processing joint venture in Minnesota. Cash Flows, Capital Expenditures and Liquidity Net cash provided by operating activities increased $21.8 million to $352.0 million, primarily reflecting favorable working capital, led by lower finished goods inventories in North America, compared to the last day of the first quarter of fiscal 2025. Capital expenditures, net of proceeds from blue chip swap transactions, were $79.2 million during the first quarter of fiscal 2026, down $256.4 million from the prior year period. This reduction reflects the completion of growth-based investments in Argentina, the Netherlands and the U.S. As of August 24, 2025, the Company had $98.6 million of cash and cash equivalents, with $1,318.4 million of available liquidity under its revolving credit facility. Capital Returned to Shareholders In the first quarter of fiscal 2026, the Company returned $51.7 million to shareholders through cash dividends. In addition, the Company repurchased $10.4 million of its common stock under the Company’s share repurchase program, with 187,259 shares repurchased at an average price of $55.34 per share. The Company has approximately $348 million remaining that is authorized and available for repurchase under the share repurchase program. In addition, on September 25, 2025, the Board of Directors declared a quarterly dividend of $0.37 per share of Lamb Weston common stock. The dividend is payable on November 28, 2025 to shareholders of record as of the close of business on October 31, 2025. Fiscal 2026 Outlook The Company reaffirms its financial targets for fiscal 2026 as follows: Focus to Win During the fourth quarter of fiscal 2025, the Company announced Focus to Win, a comprehensive plan designed to improve execution and drive profitable growth. The Focus to Win strategic plan aligns the organization around four guiding principles: focusing investments on priority global markets and segments; strengthening customer partnerships; achieving executional excellence; and setting the pace for innovation. The plan also includes the Cost Savings Program which is expected to deliver at least $250 million of annualized run rate savings by the end of fiscal year 2028. The Company believes it is on track to deliver at least $100 million of expected savings and an additional $60 million of working capital improvements by the end of fiscal year 2026. In connection with these strategic initiatives, the Company expects to recognize total pre-tax charges of $70 million to $100 million, most of which will be paid in fiscal 2026, including approximately $32 million recorded in the first fiscal quarter primarily related to the Cost Savings Program. End Notes Webcast and Conference Call Information Lamb Weston will host a conference call to review its first quarter fiscal 2026 results at 10:00 a.m. ET on September 30, 2025. Participants in the U.S. and Canada may access the conference call by dialing 888-394-8218 and participants outside the U.S. and Canada should dial +1-323-994-2093. The conference ID is 8115650. The conference call also may be accessed live on the internet. Participants can register for the event at: https://investors.lambweston.com/events-and-presentations . A rebroadcast of the conference call will be available beginning on Tuesday, September 30, 2025, after 2:00 p.m. ET at https://investors.lambweston.com/events-and-presentations . About Lamb Weston Lamb Weston is a leading supplier of frozen potato products to restaurants and retailers around the world. For 75 years, Lamb Weston has led the industry in innovation, introducing inventive products that simplify back-of-house management for its customers and make things more delicious for their customers. From the fields where Lamb Weston potatoes are grown to proactive customer partnerships, Lamb Weston always strives for more and never settles. Because, when we look at a potato, we see possibilities. Learn more about us at lambweston.com . Non-GAAP Financial Measures To supplement the financial information included in this press release, the Company has presented Adjusted Gross Profit, Adjusted SG&A, Adjusted Restructuring Expense, Adjusted Income from Operations, Adjusted Income Tax Expense, Adjusted Net Income, Adjusted Diluted EPS, Adjusted EBITDA, and net sales, price/mix and Segment Adjusted EBITDA at constant currency, each of which is considered a non-GAAP financial measure. Net sales, price/mix and Segment Adjusted EBITDA growth at constant currency provide information on the percentage change in net sales, price/mix and Segment Adjusted EBITDA growth, respectively, as if foreign currency exchange rates had remained constant between the prior and current periods. The non-GAAP financial measures presented in this press release should be viewed in addition to, and not as an alternative for, financial measures prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") that are also presented in this press release. These measures are not substitutes for their comparable GAAP financial measures, such as gross profit, SG&A, income from operations, income tax expense, net income, diluted earnings per share, net sales, or other measures prescribed by GAAP, and there are limitations to using non-GAAP financial measures. For example, the non-GAAP financial measures presented in this press release may differ from similarly titled non-GAAP financial measures presented by other companies, and other companies may not define these non-GAAP financial measures the same way as the Company does. Management uses these non-GAAP financial measures to assist in analyzing what management views as the Company’s core operating performance for purposes of business decision making. Management believes that presenting these non-GAAP financial measures provides investors with useful supplemental information because they (i) provide meaningful supplemental information regarding financial performance by excluding impacts of foreign currency exchange translation and unrealized derivative activities and other items affecting comparability between periods, (ii) permit investors to view performance using the same tools that management uses to budget, make operating and strategic decisions, and evaluate the Company’s core operating performance across periods, and (iii) otherwise provide supplemental information that may be useful to investors in evaluating the Company’s financial results. In addition, the Company believes that the presentation of these non-GAAP financial measures, when considered together with the most directly comparable GAAP financial measures and the reconciliations to those GAAP financial measures, provides investors with additional tools to understand the factors and trends affecting the Company’s underlying business than could be obtained absent these disclosures. The Company has also provided guidance in this press release with respect to certain non-GAAP financial measures, including net sales at constant currency and Adjusted EBITDA. The Company cannot predict certain items that are included in reported GAAP results, including items such as costs and other charges relating to the Cost Savings Program, the Restructuring Plan or other cost savings initiatives; strategic developments; impacts of unrealized mark-to-market derivative gains and losses; impacts of foreign currency exchange gains and losses; impacts of blue chip swap transactions; other non-recurring items such as shareholder activism expenses; and items impacting comparability. This list is not inclusive of all potential items, and the Company intends to update the list as appropriate as these items are evaluated on an ongoing basis. In addition, the items that cannot be predicted can be highly variable and could potentially have significant impacts on the Company’s GAAP financial measures. As such, prospective quantification of these items is not feasible without unreasonable efforts, and a reconciliation of forward-looking net sales at constant currency and Adjusted EBITDA to net sales and net income, respectively, has not been provided. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the federal securities laws. Words such as "believe," "drive," "focus," "deliver," "strengthen," "outlook," "reaffirm," "target," "improve," "expect," "will," and variations of such words and similar expressions are intended to identify forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements regarding: the Company’s business and financial outlook and prospects; the Company’s plans and strategies and anticipated benefits therefrom, including with respect to Focus to Win, the Cost Savings Program, and the Restructuring Plan; capital expenditures and investments; costs; working capital; cash flows; and anticipated conditions in the Company’s industry; and the global economy. These forward-looking statements are based on management’s current expectations and are subject to uncertainties and changes in circumstances. Readers of this press release should understand that these statements are not guarantees of performance or results. Many factors could affect these forward-looking statements and the Company’s actual financial results and cause them to vary materially from the expectations contained in the forward-looking statements, including those set forth in this press release. These risks and uncertainties include, among other things: consumer preferences, including restaurant traffic in North America and the Company’s international markets, and an uncertain general economic environment, including tariffs, inflationary pressures and recessionary concerns, any of which could adversely impact the Company’s business, financial condition or results of operations, including the demand and prices for its products; the availability and prices of raw materials and other commodities; operational challenges; the Company’s ability to successfully implement the Cost Savings Program, the Restructuring Plan or other cost savings or efficiency initiatives, including achieving the benefits of those activities and possible changes in the size and timing of related charges; difficulties, disruptions or delays in implementing new technology; levels of labor and people-related expenses; the Company’s ability to successfully execute its long-term value creation strategies, including Focus to Win; the Company’s ability to execute on large capital projects, including construction of new production lines or facilities; the competitive environment and related conditions in the markets in which the Company operates; political and economic conditions in the countries in which the Company conducts business and other factors related to its international operations; disruptions in the global economy caused by conflicts such as the war in Ukraine and conflicts in the Middle East and the possible related heightening of the Company’s other known risks; the ultimate outcome of litigation or any product recalls or withdrawals; changes in the Company’s relationships with its growers or significant customers; impacts on the Company’s business due to health pandemics or other contagious outbreaks, such as the COVID-19 pandemic, including impacts on demand for its products, increased costs, disruption of supply, other constraints in the availability of key commodities and other necessary services or restrictions imposed by public health authorities or governments; disruption of the Company’s access to export mechanisms; risks associated with integrating acquired businesses; risks associated with other possible acquisitions; the Company’s debt levels; actions of governments and regulatory factors affecting the Company’s businesses; the Company’s ability to pay regular quarterly cash dividends and the amounts and timing of any future dividends; and other risks described in the Company’s reports filed from time to time with the Securities and Exchange Commission ("SEC"). The Company cautions readers not to place undue reliance on any forward-looking statements included in this press release, which speak only as of the date of this press release. The Company undertakes no responsibility for updating these statements, except as required by law.   View source version on businesswire.com: https://www.businesswire.com/news/home/20250930710677/en/ Contacts For more information, please contact: Investors: Debbie Hancock 208-202-7259 [email protected] Media: Erin Gardiner 208-202-7257 [email protected]

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