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LW posted Q2 EPS of 69 cents and sales of $1.62B, topping consensus estimates despite lower Y/Y earnings.
Volume rose 8% on customer wins and share gains, while price/mix fell 8% amid pricing and trade support.
North America EBITDA rose on higher volumes and cost savings, while International EBITDA fell on higher costs.
Lamb Weston Holdings, Inc. ((LW - Free Report) ) reported solid second-quarter fiscal 2026 results, wherein both top and bottom lines beat the Zacks Consensus Estimate. While net sales increased, earnings decreased from the year-ago period’s actuals.
LW’s adjusted earnings were 69 cents per share, beating the Zacks Consensus Estimate of 67 cents. The decrease of 5% was due to reduced adjusted gross profit, partially offset by decreased adjusted selling, general and administrative (SG&A).
Net sales amounted to $1,618.1 million, beating the Zacks Consensus Estimate of $1,593 million. The top line increased $17.2 million year over year.
LW’s Quarterly Results: Key Metrics & Insights
On a constant-currency basis, sales were flat, as solid 8% volume growth was outweighed by an 8% drop in price/mix. Volume growth was driven by customer wins, share gains and retention, particularly in North America and Asia. The decrease in price/mix reflects continued customer support through pricing and trade actions, including the carryover impact of fiscal 2025 pricing, within a highly competitive global market environment. Our model suggested a volume increase of 5.3% in the quarter.
Adjusted gross profit fell $15.6 million from the prior year, landing at $327.9 million, with weaker price/mix serving as the main drag. We expected adjusted gross margin contraction of 100 bps.
Adjusted SG&A expenses fell $7.8 million year over year, totaling $145.1 million, supported by cost-savings measures, partially offset by higher compensation and benefits accruals.
Adjusted EBITDA decreased $8.5 million year over year, reaching $285.7 million. This decline was due to reduced adjusted gross profit and equity method investment earnings, partially offset by lower adjusted SG&A.
LW Provides Q2 Insights by Segment
Net sales for the North America segment, which covers customers in the United States, Canada and Mexico, were flat, reaching $1,069.5 million compared with the prior-year quarter. Volume rose 8%, driven by recent customer contract wins, share gains and broad-based growth across channels.
The price/mix of the segment fell 8%, reflecting the carryover impact of fiscal 2025 price investments, ongoing customer support through price and trade, and negative channel mix.
The North America segment’s adjusted EBITDA increased by $18.6 million to $287.8 million. The increase was driven by elevated volumes, reduced manufacturing costs per pound and adjusted SG&A, reflecting benefits from cost savings measures and improved operating efficiencies. These benefits were partially offset by continued price and trade support for customers.
Net sales for the International segment, which includes all customers outside North America, grew 4% to $548.6 million, including a favorable $22.6 million from foreign currency translation. At constant currency, net sales decreased 1%. Volume grew 7%, driven by strength in Asia and with multinational chain customers.
The price/mix of the segment declined 8% due to continued pricing and trade actions to support customers in a competitive market environment, as well as an unfavorable mix.
International segment adjusted EBITDA decreased by $21.4 million to $27.2 million. The decrease was primarily caused by elevated manufacturing costs per pound, including increased fixed factory burden due to lower utilization of international production facilities and start-up costs associated with the new production facility in Argentina. These higher costs were partially offset by benefits from cost savings measures and elevated sales volumes.
Lamb Weston’s Financial Health Snapshot
The company ended the quarter with cash and cash equivalents of $82.7 million, long-term debt and financing obligations (excluding the current portion) of $3,648.9 million and total shareholders’ equity of $1,754.4 million.
The company generated $530.4 million as net cash from operating activities for the 26 weeks ending Nov. 23, 2025, wherein capital expenditures amounted to $155.7 million.
In the second quarter of fiscal 2026, Lamb Weston returned $51.6 million to its shareholders through cash dividends and repurchased $39.6 million of common stock under the share repurchase program, representing 617,623 shares. Approximately $308 million remains authorized and available for repurchases under the program.
On Dec. 17, 2025, management approved a 3% increase in the quarterly dividend, raising the dividend to 38 cents per share. The dividend is payable on Feb. 27, 2026, to its shareholders of record as of the close of business on Jan. 30.
What to Expect From LW in FY26?
The company still expects net sales at constant currency in the range of $6.35 billion to $6.55 billion and adjusted EBITDA of $1.00 billion to $1.20 billion. Capital expenditures are expected to total approximately $500 million.
LW’s Share Price Performance
Shares of this Zacks Rank #4 (Sell) company have gained 7.2% in the past three months against the industry’s 6.9% decline.
Image Source: Zacks Investment Research
Stocks to Consider
United Natural Foods, Inc. ((UNFI - Free Report) ) distributes natural, organic, specialty, produce and conventional grocery and non-food products in the United States and Canada. At present, United Natural flaunts a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for United Natural’s current fiscal-year sales and earnings implies growth of 1% and 187.3%, respectively, from the year-ago figures. UNFI delivered a trailing four-quarter earnings surprise of 52.1%, on average.
Village Farms International, Inc. ((VFF - Free Report) ) produces, markets and distributes greenhouse-grown tomatoes, bell peppers, cucumbers and mini-cukes in North America. It sports a Zacks Rank #1. Village Farms delivered a trailing four-quarter earnings surprise of 155.6%, on average.
The Zacks Consensus Estimate for Village Farms’ current fiscal-year earnings indicates growth of 165.6% from the prior-year levels.
The Vita Coco Company, Inc. ((COCO - Free Report) ) develops, markets and distributes coconut water products under the Vita Coco brand name. COCO currently flaunts a Zacks Rank #1. Vita Coco delivered a trailing four-quarter earnings surprise of 30.4%, on average.
The Zacks Consensus Estimate for Vita Coco's current fiscal-year sales and earnings implies growth of 18% and 15%, respectively, from the year-ago figures.
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Lamb Weston's Q2 Earnings Beat Estimates, Sales Rise Y/Y
Key Takeaways
Lamb Weston Holdings, Inc. ((LW - Free Report) ) reported solid second-quarter fiscal 2026 results, wherein both top and bottom lines beat the Zacks Consensus Estimate. While net sales increased, earnings decreased from the year-ago period’s actuals.
LW’s adjusted earnings were 69 cents per share, beating the Zacks Consensus Estimate of 67 cents. The decrease of 5% was due to reduced adjusted gross profit, partially offset by decreased adjusted selling, general and administrative (SG&A).
Lamb Weston Price, Consensus and EPS Surprise
Lamb Weston price-consensus-eps-surprise-chart | Lamb Weston Quote
Net sales amounted to $1,618.1 million, beating the Zacks Consensus Estimate of $1,593 million. The top line increased $17.2 million year over year.
LW’s Quarterly Results: Key Metrics & Insights
On a constant-currency basis, sales were flat, as solid 8% volume growth was outweighed by an 8% drop in price/mix. Volume growth was driven by customer wins, share gains and retention, particularly in North America and Asia. The decrease in price/mix reflects continued customer support through pricing and trade actions, including the carryover impact of fiscal 2025 pricing, within a highly competitive global market environment. Our model suggested a volume increase of 5.3% in the quarter.
Adjusted gross profit fell $15.6 million from the prior year, landing at $327.9 million, with weaker price/mix serving as the main drag. We expected adjusted gross margin contraction of 100 bps.
Adjusted SG&A expenses fell $7.8 million year over year, totaling $145.1 million, supported by cost-savings measures, partially offset by higher compensation and benefits accruals.
Adjusted EBITDA decreased $8.5 million year over year, reaching $285.7 million. This decline was due to reduced adjusted gross profit and equity method investment earnings, partially offset by lower adjusted SG&A.
LW Provides Q2 Insights by Segment
Net sales for the North America segment, which covers customers in the United States, Canada and Mexico, were flat, reaching $1,069.5 million compared with the prior-year quarter. Volume rose 8%, driven by recent customer contract wins, share gains and broad-based growth across channels.
The price/mix of the segment fell 8%, reflecting the carryover impact of fiscal 2025 price investments, ongoing customer support through price and trade, and negative channel mix.
The North America segment’s adjusted EBITDA increased by $18.6 million to $287.8 million. The increase was driven by elevated volumes, reduced manufacturing costs per pound and adjusted SG&A, reflecting benefits from cost savings measures and improved operating efficiencies. These benefits were partially offset by continued price and trade support for customers.
Net sales for the International segment, which includes all customers outside North America, grew 4% to $548.6 million, including a favorable $22.6 million from foreign currency translation. At constant currency, net sales decreased 1%. Volume grew 7%, driven by strength in Asia and with multinational chain customers.
The price/mix of the segment declined 8% due to continued pricing and trade actions to support customers in a competitive market environment, as well as an unfavorable mix.
International segment adjusted EBITDA decreased by $21.4 million to $27.2 million. The decrease was primarily caused by elevated manufacturing costs per pound, including increased fixed factory burden due to lower utilization of international production facilities and start-up costs associated with the new production facility in Argentina. These higher costs were partially offset by benefits from cost savings measures and elevated sales volumes.
Lamb Weston’s Financial Health Snapshot
The company ended the quarter with cash and cash equivalents of $82.7 million, long-term debt and financing obligations (excluding the current portion) of $3,648.9 million and total shareholders’ equity of $1,754.4 million.
The company generated $530.4 million as net cash from operating activities for the 26 weeks ending Nov. 23, 2025, wherein capital expenditures amounted to $155.7 million.
In the second quarter of fiscal 2026, Lamb Weston returned $51.6 million to its shareholders through cash dividends and repurchased $39.6 million of common stock under the share repurchase program, representing 617,623 shares. Approximately $308 million remains authorized and available for repurchases under the program.
On Dec. 17, 2025, management approved a 3% increase in the quarterly dividend, raising the dividend to 38 cents per share. The dividend is payable on Feb. 27, 2026, to its shareholders of record as of the close of business on Jan. 30.
What to Expect From LW in FY26?
The company still expects net sales at constant currency in the range of $6.35 billion to $6.55 billion and adjusted EBITDA of $1.00 billion to $1.20 billion. Capital expenditures are expected to total approximately $500 million.
LW’s Share Price Performance
Shares of this Zacks Rank #4 (Sell) company have gained 7.2% in the past three months against the industry’s 6.9% decline.
Image Source: Zacks Investment Research
Stocks to Consider
United Natural Foods, Inc. ((UNFI - Free Report) ) distributes natural, organic, specialty, produce and conventional grocery and non-food products in the United States and Canada. At present, United Natural flaunts a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for United Natural’s current fiscal-year sales and earnings implies growth of 1% and 187.3%, respectively, from the year-ago figures. UNFI delivered a trailing four-quarter earnings surprise of 52.1%, on average.
Village Farms International, Inc. ((VFF - Free Report) ) produces, markets and distributes greenhouse-grown tomatoes, bell peppers, cucumbers and mini-cukes in North America. It sports a Zacks Rank #1. Village Farms delivered a trailing four-quarter earnings surprise of 155.6%, on average.
The Zacks Consensus Estimate for Village Farms’ current fiscal-year earnings indicates growth of 165.6% from the prior-year levels.
The Vita Coco Company, Inc. ((COCO - Free Report) ) develops, markets and distributes coconut water products under the Vita Coco brand name. COCO currently flaunts a Zacks Rank #1. Vita Coco delivered a trailing four-quarter earnings surprise of 30.4%, on average.
The Zacks Consensus Estimate for Vita Coco's current fiscal-year sales and earnings implies growth of 18% and 15%, respectively, from the year-ago figures.