Lamb Weston Raises Fiscal 2027 Profit Outlook
The frozen potato supplier lifted its full-year adjusted EBITDA range to $1.125 billion to $1.215 billion after a first quarter that beat its own targets.
Lamb Weston Holdings (LW) raised its fiscal 2027 outlook for net sales, adjusted diluted earnings and adjusted EBITDA after a first quarter that exceeded its own targets, even as reported profit fell and International results weakened.
The frozen potato supplier posted first-quarter net sales of $1.67 billion, up 1% from a year earlier, after a 6% year-over-year increase in the immediately preceding quarter. Sales volume rose 2% and price/mix declined 2%. Adjusted EBITDA was $286 million, down 5% after a 2% decline in the prior quarter. Reported net income fell 55% to $29 million and diluted earnings were $0.21 a share. Adjusted net income was $103 million and adjusted diluted EPS was $0.75, essentially unchanged from the year-ago quarter.
President and Chief Executive Officer Mike Smith said the company was “off to a solid start to the year, delivering first-quarter net sales and profit above our expectations,” and that results were driven by continued momentum in North America, where customer relationships fueled volume growth and cost savings continued.
North America net sales increased 5% to $1.14 billion. Sales volume grew for the seventh consecutive quarter and rose 7%, attributed to higher demand from existing customers and customer wins. Price/mix declined 2% on price and trade support and a mix shift toward faster-growing chain customers and private-label products. North America segment adjusted EBITDA increased 11% to $287 million. Higher volumes, cost savings and $5 million in tariff refunds, as well as higher equity-method earnings, more than offset price support, mix and inflation in key input costs.
International net sales declined 8% to $529 million, with volume down 6% and price/mix down 2%. International segment adjusted EBITDA declined 54% to $27 million. The decline was in line with expectations and reflected lower sales volume and net sales mostly in Europe, higher manufacturing costs per pound, including carry-in of prior-year higher potato costs, factory underutilization and inflation.
Smith said EMEA continues to face challenging market conditions. As the company worked through prior-year crop carry-in costs, he said segment adjusted EBITDA had improved sequentially. Lamb Weston ended production at Broekhuizenvorst and transitioned customer fulfillment within its network, enabling further cost optimization.
The company continues to experience unexpected inflationary pressure across key input costs and freight. Capacity optimization started more than a year ago in North America has led to an approximate 10-percentage-point increase in utilization, and those efforts are expected to enable the company to overdeliver forecasted savings from its cost savings program. Selling, general and administrative expenses increased primarily due to lapping $7 million of non-recurring miscellaneous income in the first quarter of fiscal 2026. Ongoing cost savings mostly offset increases in outside services and fixed expense.
Cash provided by operating activities was $235 million. Capital expenditures were $91 million. Cash and cash equivalents were $166 million as of August 30, 2026, with $1.24 billion of additional available liquidity under the revolving credit facility. The company returned $52 million through dividends and did not repurchase shares in the quarter. About $245 million remains authorized for repurchase. The board declared a quarterly dividend of $0.38 a share.
For full-year fiscal 2027, the company raised its net sales outlook from 0.0% to 1.0% growth to up low single digits, versus fiscal 2026 (52-week adjusted) net sales of $6.485 billion. Adjusted EBITDA guidance moved to $1.125 billion to $1.215 billion from $1.10 billion to $1.20 billion. Adjusted diluted EPS guidance moved to $3.05 to $3.35 from $2.95 to $3.25. Capital expenditures remain $380 million to $410 million. Adjusted income from operations was updated to $730 million to $810 million.
Smith said the company is advancing its Focus to Win strategy, including cross-functional work to sharpen prioritization of markets and channels, and that it expects to complete that work in the coming months and share a roadmap at an Investor Day in early calendar 2027.