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LW's Q1 Earnings Coming Up: Will the Surprise Streak Continue?
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Key Takeaways
LW's Q1 sales are expected to be flat, while adjusted EBITDA is expected to decline in the low teens.
Higher potato and edible-oil costs, plus pricing and mix pressures, could weigh on Q1 profitability.
North America volume growth, market-share gains and supply-chain execution may help support results.
Lamb Weston Holdings, Inc. (LW - Free Report) is likely to witness a top-and bottom-line decline when it reports first-quarter fiscal 2027 earnings on Oct. 6. The Zacks Consensus Estimate for revenues is pegged at $1.7 billion, indicating a 0.3% decrease from the year-ago reported number.
The consensus mark for earnings has risen by a penny over the past seven days to 59 cents a share, which, however, suggests a fall of 20.3% from the figure recorded in the year-ago period. LW has a trailing four-quarter surprise of 24.6%, on average.
Lamb Weston’s first-quarter fiscal 2027 results are likely to reflect continued cost pressures. Management indicated that the carryover effects of prior-year potato costs and elevated edible-oil costs were expected to have a greater impact in the first quarter. The company also noted that fourth-quarter input-cost volatility had flowed into finished-goods inventory that would move through during the quarter, which could have weighed on profitability.
Pricing and mix may also have remained a headwind. In North America, modest price/mix investments and cost inflation are expected to have pressured profitability, while International results are likely to remain challenged by competitive conditions in EMEA. These factors, along with the carry-through of prior-year potato crop costs and price/mix, are expected to have weighed on first-quarter performance, per the last earnings call.
Against this backdrop, management expects first-quarter net sales to be flat and adjusted EBITDA to decline in the low-teens range before growth improves through the remainder of the year.
On the positive side, North America’s continued sales-volume growth and market-share gains are likely to support results. Customer wins, strong retention and improved supply-chain execution may have aided volumes, while ongoing cost-saving initiatives and operating efficiencies could have partially offset inflationary pressures.
Earnings Whispers for LW
Our proven model predicts 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 exactly the case here.
Lamb Weston currently carries a Zacks Rank #3 and has an Earnings ESP of +3.61%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks With the Favorable Combination
Here are some other companies worth considering, as our model shows that these, too, have the right combination of elements to beat on earnings this reporting cycle.
Sysco Corporation (SYY - Free Report) currently has an Earnings ESP of +2.89% and a Zacks Rank of 2. The consensus estimate for the quarterly revenues is pinned at $22.2 billion, which suggests almost 5% growth 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 Sysco’s upcoming quarter’s EPS is pegged at $1.16, which calls for a 0.9% increase from the year-ago period figure. SYY delivered a trailing four-quarter earnings surprise of nearly 1%, on average.
The Coca-Cola Company (KO - Free Report) currently has an Earnings ESP of +0.57% and a Zacks Rank #3. The consensus estimate for quarterly revenues is pegged at $12.9 billion, which indicates an improvement of about 4% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Coca-Cola’s upcoming quarter’s EPS is pegged at 87 cents, which calls for 6.1% growth from the figure reported in the prior-year quarter. KO delivered a trailing four-quarter earnings surprise of 4.6%, on average.
The Kraft Heinz Company (KHC - Free Report) currently has an Earnings ESP of +2.47% and a Zacks Rank of 3. The Zacks Consensus Estimate for its upcoming quarter’s revenues is pegged at about $6 billion, suggesting a 3.1% decline from the figure reported in the prior-year quarter.
The consensus estimate for The Kraft Heinz Company’s earnings is pegged at 43 cents per share, implying a decrease of 29.5% from the year-ago quarter. KHC delivered a trailing four-quarter earnings surprise of 9.6%, on average.
View the Zacks #1 Rank List
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LW's Q1 Earnings Coming Up: Will the Surprise Streak Continue?
Key Takeaways
Lamb Weston Holdings, Inc. (LW - Free Report) is likely to witness a top-and bottom-line decline when it reports first-quarter fiscal 2027 earnings on Oct. 6. The Zacks Consensus Estimate for revenues is pegged at $1.7 billion, indicating a 0.3% decrease from the year-ago reported number.
The consensus mark for earnings has risen by a penny over the past seven days to 59 cents a share, which, however, suggests a fall of 20.3% from the figure recorded in the year-ago period. LW has a trailing four-quarter surprise of 24.6%, on average.
Lamb Weston Price, Consensus and EPS Surprise
Lamb Weston price-consensus-eps-surprise-chart | Lamb Weston Quote
Factors Likely to Influence LW’s Upcoming Results
Lamb Weston’s first-quarter fiscal 2027 results are likely to reflect continued cost pressures. Management indicated that the carryover effects of prior-year potato costs and elevated edible-oil costs were expected to have a greater impact in the first quarter. The company also noted that fourth-quarter input-cost volatility had flowed into finished-goods inventory that would move through during the quarter, which could have weighed on profitability.
Pricing and mix may also have remained a headwind. In North America, modest price/mix investments and cost inflation are expected to have pressured profitability, while International results are likely to remain challenged by competitive conditions in EMEA. These factors, along with the carry-through of prior-year potato crop costs and price/mix, are expected to have weighed on first-quarter performance, per the last earnings call.
Against this backdrop, management expects first-quarter net sales to be flat and adjusted EBITDA to decline in the low-teens range before growth improves through the remainder of the year.
On the positive side, North America’s continued sales-volume growth and market-share gains are likely to support results. Customer wins, strong retention and improved supply-chain execution may have aided volumes, while ongoing cost-saving initiatives and operating efficiencies could have partially offset inflationary pressures.
Earnings Whispers for LW
Our proven model predicts 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 exactly the case here.
Lamb Weston currently carries a Zacks Rank #3 and has an Earnings ESP of +3.61%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks With the Favorable Combination
Here are some other companies worth considering, as our model shows that these, too, have the right combination of elements to beat on earnings this reporting cycle.
Sysco Corporation (SYY - Free Report) currently has an Earnings ESP of +2.89% and a Zacks Rank of 2. The consensus estimate for the quarterly revenues is pinned at $22.2 billion, which suggests almost 5% growth 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 Sysco’s upcoming quarter’s EPS is pegged at $1.16, which calls for a 0.9% increase from the year-ago period figure. SYY delivered a trailing four-quarter earnings surprise of nearly 1%, on average.
The Coca-Cola Company (KO - Free Report) currently has an Earnings ESP of +0.57% and a Zacks Rank #3. The consensus estimate for quarterly revenues is pegged at $12.9 billion, which indicates an improvement of about 4% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Coca-Cola’s upcoming quarter’s EPS is pegged at 87 cents, which calls for 6.1% growth from the figure reported in the prior-year quarter. KO delivered a trailing four-quarter earnings surprise of 4.6%, on average.
The Kraft Heinz Company (KHC - Free Report) currently has an Earnings ESP of +2.47% and a Zacks Rank of 3. The Zacks Consensus Estimate for its upcoming quarter’s revenues is pegged at about $6 billion, suggesting a 3.1% decline from the figure reported in the prior-year quarter.
The consensus estimate for The Kraft Heinz Company’s earnings is pegged at 43 cents per share, implying a decrease of 29.5% from the year-ago quarter. KHC delivered a trailing four-quarter earnings surprise of 9.6%, on average.