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Lamb Weston (LW) Readies for Q3 Earnings: What to Expect?
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Lamb Weston Holdings, Inc. (LW - Free Report) is likely to register top-line growth when it reports third-quarter fiscal 2024 earnings on Apr 4. The Zacks Consensus Estimate for revenues is pegged at $1.64 billion, which suggests growth of 30.9% from the prior-year quarter’s reported figure.
The consensus mark for quarterly earnings has decreased by a penny in the past seven days to $1.40 per share. This indicates a decline of 2.1% from the year-ago quarter’s reported figure. LW has a trailing four-quarter earnings surprise of 28.8%, on average.
Factors to Note
Lamb Weston has been reaping the benefits of an effective pricing scenario and solid operating momentum. The company’s pricing efforts are likely to keep aiding its top-line growth. Net sales, excluding buyouts, are projected to grow 6.5-8.5% in fiscal 2024 on a low-double-digit percentage point increase in the price/mix. We expect the price/mix to be up 9.7% in the third quarter of fiscal 2024.
Lamb Weston’s focus on improving supply chain productivity, global expansion efforts, bettering manufacturing and system capabilities and strengthening product, customer and channel mix have been key growth drivers. Additionally, efforts to boost offerings and expand capacity have enabled the company to meet rising demand conditions for snacks and fries effectively. Upsides like these bode well for the quarter under review.
However, volume concerns due to a cautious view of the consumer persist. Volumes are likely to decline by mid-single-digits percentage points in fiscal 2024, which raises worries for the third quarter as well. Our model suggests a 190-basis point contraction in the gross margin to 29.8%.
Additionally, management expects the fiscal third-quarter gross margin to be under pressure by escalated manufacturing costs, reflecting lower fixed cost coverage and other cost inefficiencies. Lamb Weston has also been witnessing increased SG&A expenses for a while.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Lamb Weston this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.
Lamb Weston has an Earnings ESP of -1.07% and carries a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are three companies worth considering as our model shows that these have the correct combination to beat on earnings this time:
The Hershey Company (HSY - Free Report) has an Earnings ESP of +0.72% and a Zacks Rank #3. The company is likely to witness top-line growth when it reports first-quarter 2024 results. The Zacks Consensus Estimate for Hershey’s quarterly revenues is pegged at $3.12 billion, which suggests a rise of 4.3% from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Hershey’s quarterly EPS has declined by 2 cents in the past 30 days to $2.72, which calls for a decrease of 8.1% from the year-ago quarter’s level. HSY has a trailing four-quarter earnings surprise of 6.5%, on average.
Newell Brands (NWL - Free Report) currently has an Earnings ESP of +10.71% and a Zacks Rank #3. The company is likely to register a top-and-bottom-line decline when it reports first-quarter 2024 numbers. The Zacks Consensus Estimate for Newell’s quarterly revenues is pegged at $1.64 billion, which calls for a drop of 8.9% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Newell’s bottom line stands at a loss of 7 cents, which suggests a decrease of 16.7% from the year-ago quarter’s loss of 6 cents. HSY has a trailing four-quarter earnings surprise of 33.4%, on average.
Church & Dwight (CHD - Free Report) currently has an Earnings ESP of +1.32% and a Zacks Rank of 3. The company is likely to register top-line and bottom-line increases when it reports first-quarter 2024 numbers. The Zacks Consensus Estimate for Church & Dwight’s quarterly revenues is pegged at $1.49 billion, which implies growth of 4.3% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Church & Dwight’s quarterly earnings of 86 cents suggests a rise of 1.2% from the year-ago quarter’s levels. CHD has a trailing four-quarter earnings surprise of 9.7%, on average.
Image: Bigstock
Lamb Weston (LW) Readies for Q3 Earnings: What to Expect?
Lamb Weston Holdings, Inc. (LW - Free Report) is likely to register top-line growth when it reports third-quarter fiscal 2024 earnings on Apr 4. The Zacks Consensus Estimate for revenues is pegged at $1.64 billion, which suggests growth of 30.9% from the prior-year quarter’s reported figure.
The consensus mark for quarterly earnings has decreased by a penny in the past seven days to $1.40 per share. This indicates a decline of 2.1% from the year-ago quarter’s reported figure. LW has a trailing four-quarter earnings surprise of 28.8%, on average.
Factors to Note
Lamb Weston has been reaping the benefits of an effective pricing scenario and solid operating momentum. The company’s pricing efforts are likely to keep aiding its top-line growth. Net sales, excluding buyouts, are projected to grow 6.5-8.5% in fiscal 2024 on a low-double-digit percentage point increase in the price/mix. We expect the price/mix to be up 9.7% in the third quarter of fiscal 2024.
Lamb Weston Price, Consensus and EPS Surprise
Lamb Weston price-consensus-eps-surprise-chart | Lamb Weston Quote
Lamb Weston’s focus on improving supply chain productivity, global expansion efforts, bettering manufacturing and system capabilities and strengthening product, customer and channel mix have been key growth drivers. Additionally, efforts to boost offerings and expand capacity have enabled the company to meet rising demand conditions for snacks and fries effectively. Upsides like these bode well for the quarter under review.
However, volume concerns due to a cautious view of the consumer persist. Volumes are likely to decline by mid-single-digits percentage points in fiscal 2024, which raises worries for the third quarter as well. Our model suggests a 190-basis point contraction in the gross margin to 29.8%.
Additionally, management expects the fiscal third-quarter gross margin to be under pressure by escalated manufacturing costs, reflecting lower fixed cost coverage and other cost inefficiencies. Lamb Weston has also been witnessing increased SG&A expenses for a while.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Lamb Weston this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.
Lamb Weston has an Earnings ESP of -1.07% and carries a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are three companies worth considering as our model shows that these have the correct combination to beat on earnings this time:
The Hershey Company (HSY - Free Report) has an Earnings ESP of +0.72% and a Zacks Rank #3. The company is likely to witness top-line growth when it reports first-quarter 2024 results. The Zacks Consensus Estimate for Hershey’s quarterly revenues is pegged at $3.12 billion, which suggests a rise of 4.3% from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Hershey’s quarterly EPS has declined by 2 cents in the past 30 days to $2.72, which calls for a decrease of 8.1% from the year-ago quarter’s level. HSY has a trailing four-quarter earnings surprise of 6.5%, on average.
Newell Brands (NWL - Free Report) currently has an Earnings ESP of +10.71% and a Zacks Rank #3. The company is likely to register a top-and-bottom-line decline when it reports first-quarter 2024 numbers. The Zacks Consensus Estimate for Newell’s quarterly revenues is pegged at $1.64 billion, which calls for a drop of 8.9% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Newell’s bottom line stands at a loss of 7 cents, which suggests a decrease of 16.7% from the year-ago quarter’s loss of 6 cents. HSY has a trailing four-quarter earnings surprise of 33.4%, on average.
Church & Dwight (CHD - Free Report) currently has an Earnings ESP of +1.32% and a Zacks Rank of 3. The company is likely to register top-line and bottom-line increases when it reports first-quarter 2024 numbers. The Zacks Consensus Estimate for Church & Dwight’s quarterly revenues is pegged at $1.49 billion, which implies growth of 4.3% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Church & Dwight’s quarterly earnings of 86 cents suggests a rise of 1.2% from the year-ago quarter’s levels. CHD has a trailing four-quarter earnings surprise of 9.7%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.