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LW Q1 Earnings Beat Estimates on Higher North America Volume
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Key Takeaways
LW's fiscal Q1 sales rose 0.7% as 2% volume growth offset a 2% decline in price/mix.
North America sales climbed 5% as volume grew 7%, marking a seventh straight quarter of volume gains.
LW raised fiscal 2027 sales, adjusted EBITDA and earnings guidance after the stronger first quarter.
Lamb Weston Holdings, Inc. (LW - Free Report) reported solid first-quarter fiscal 2027 results, wherein both top and bottom lines beat the Zacks Consensus Estimate and increased year over year.
LW’s adjusted earnings were 75 cents per share, up 1.4% year over year. The bottom line beat the Zacks Consensus Estimate of 59 cents.
Net sales amounted to $1,670.3 million, beating the Zacks Consensus Estimate of $1,654 million. The top line increased 0.7% year over year, driven by a 2% increase in sales volume and an immaterial favorable currency impact partially offset by a 2% decline in price/mix. Our model suggested a volume increase of 3.2% in the quarter.
LW’s Quarterly Results: Key Metrics & Insights
Adjusted gross profit fell 6.5% year over year to $316.8 million from $338.9 million. The adjusted gross margin decreased 140 basis points (bps) to 19%. Our model projected adjusted gross margin contraction of about 200 basis points to 18.4%.
Adjusted selling, general and administrative expenses rose 5.1% to $139.2 million. As a percentage of sales, the same increased 30 bps to 8.3%.
Adjusted EBITDA fell 5.5% year over year to $285.6 million, while adjusted EBITDA margin contracted 110 bps to 17.1%.
LW Provides Q1 Insights by Segment
North America segment sales increased 5.2% year over year to $1,141.4 million. Volume grew 6.7%, marking the seventh consecutive quarter of volume growth, driven by stronger demand from existing customers and customer wins. Price/mix declined 1.7%, reflecting pricing and trade support as well as a mix shift toward faster-growing chain customers and private-label products.
Segment adjusted EBITDA increased 11% to $287.3 million, aided by higher volume, cost savings and $5 million of tariff refunds.
International segment sales declined 8% to $528.9 million. Volume decreased 6.4%, while price/mix fell 2%, as weaker performance in Europe continued to weigh on the business.
International segment adjusted EBITDA plunged 54% to $26.5 million. Lower sales, higher manufacturing costs per pound, prior-year potato cost carry-in, factory underutilization and inflation pressured results.
Lamb Weston’s Financial Health Snapshot
The company ended the quarter with cash and cash equivalents of $166.3 million, long-term debt and financing obligations (excluding the current portion) of $3,578.5 million and total shareholders’ equity of $1,806.7 million.
LW generated $234.8 million as net cash from operating activities for the 13 weeks ending Aug. 30, 2026, wherein capital expenditures amounted to $91 million.
The company returned $52 million to shareholders through dividends during the quarter and had about $245 million remaining under its share-repurchase authorization.
Management declared a quarterly dividend of 38 cents per share, payable on Dec. 4, to its shareholders of record as of Nov. 6, 2026.
What to Expect From LW in FY27?
For fiscal 2027, Lamb Weston now expects net sales to increase a low-single-digit percentage from the adjusted fiscal 2026 base of $6.5 billion, compared with prior forecast of flat to 1% growth.
Adjusted EBITDA guidance increased to $1.125-$1.215 billion from $1.10-$1.20 billion. Adjusted earnings are now projected between $3.05 and $3.35 per share, up from the previous $2.95-$3.25 range. Capital spending guidance was maintained at $380-$410 million.
LW’s Share Price Performance
Shares of this Zacks Rank #3 (Hold) company have gained 2.6% in the past three months against the industry’s 7.1% decline.
Image Source: Zacks Investment Research
Stocks to Consider
The Chefs' Warehouse, Inc. (CHEF - Free Report) distributes specialty food and center-of-the-plate products in the United States, the Middle East and Canada. At present, CHEF flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Chefs' Warehouse’s current fiscal-year sales and earnings implies growth of 10.8% and 33.7%, respectively, from the year-ago reported figures. Chefs' Warehouse delivered a trailing four-quarter earnings surprise of 30.4%, on average.
Mama's Creations, Inc. (MAMA - Free Report) manufactures and markets fresh deli-prepared foods in the United States. At present, MAMA holds a Zacks Rank of 2 (Buy). Mama's Creations delivered a trailing four-quarter earnings surprise of 121.7%, on average.
The consensus estimate for Mama's Creations’ current fiscal-year sales and earnings implies growth of 30.3% and 66.7%, respectively, from the year-ago figures.
Utz Brands (UTZ - Free Report) engages in the manufacture, marketing and distribution of snack foods in the United States. It presently carries a Zacks Rank of 2. UTZ delivered a trailing four-quarter earnings surprise of 1.8%, on average.
The Zacks Consensus Estimate for Utz Brands’ current financial-year sales indicates growth of 3.7% from the year-ago numbers.
View the Zacks #1 Rank List
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LW Q1 Earnings Beat Estimates on Higher North America Volume
Key Takeaways
Lamb Weston Holdings, Inc. (LW - Free Report) reported solid first-quarter fiscal 2027 results, wherein both top and bottom lines beat the Zacks Consensus Estimate and increased year over year.
LW’s adjusted earnings were 75 cents per share, up 1.4% year over year. The bottom line beat the Zacks Consensus Estimate of 59 cents.
Lamb Weston Price, Consensus and EPS Surprise
Lamb Weston price-consensus-eps-surprise-chart | Lamb Weston Quote
Net sales amounted to $1,670.3 million, beating the Zacks Consensus Estimate of $1,654 million. The top line increased 0.7% year over year, driven by a 2% increase in sales volume and an immaterial favorable currency impact partially offset by a 2% decline in price/mix. Our model suggested a volume increase of 3.2% in the quarter.
LW’s Quarterly Results: Key Metrics & Insights
Adjusted gross profit fell 6.5% year over year to $316.8 million from $338.9 million. The adjusted gross margin decreased 140 basis points (bps) to 19%. Our model projected adjusted gross margin contraction of about 200 basis points to 18.4%.
Adjusted selling, general and administrative expenses rose 5.1% to $139.2 million. As a percentage of sales, the same increased 30 bps to 8.3%.
Adjusted EBITDA fell 5.5% year over year to $285.6 million, while adjusted EBITDA margin contracted 110 bps to 17.1%.
LW Provides Q1 Insights by Segment
North America segment sales increased 5.2% year over year to $1,141.4 million. Volume grew 6.7%, marking the seventh consecutive quarter of volume growth, driven by stronger demand from existing customers and customer wins. Price/mix declined 1.7%, reflecting pricing and trade support as well as a mix shift toward faster-growing chain customers and private-label products.
Segment adjusted EBITDA increased 11% to $287.3 million, aided by higher volume, cost savings and $5 million of tariff refunds.
International segment sales declined 8% to $528.9 million. Volume decreased 6.4%, while price/mix fell 2%, as weaker performance in Europe continued to weigh on the business.
International segment adjusted EBITDA plunged 54% to $26.5 million. Lower sales, higher manufacturing costs per pound, prior-year potato cost carry-in, factory underutilization and inflation pressured results.
Lamb Weston’s Financial Health Snapshot
The company ended the quarter with cash and cash equivalents of $166.3 million, long-term debt and financing obligations (excluding the current portion) of $3,578.5 million and total shareholders’ equity of $1,806.7 million.
LW generated $234.8 million as net cash from operating activities for the 13 weeks ending Aug. 30, 2026, wherein capital expenditures amounted to $91 million.
The company returned $52 million to shareholders through dividends during the quarter and had about $245 million remaining under its share-repurchase authorization.
Management declared a quarterly dividend of 38 cents per share, payable on Dec. 4, to its shareholders of record as of Nov. 6, 2026.
What to Expect From LW in FY27?
For fiscal 2027, Lamb Weston now expects net sales to increase a low-single-digit percentage from the adjusted fiscal 2026 base of $6.5 billion, compared with prior forecast of flat to 1% growth.
Adjusted EBITDA guidance increased to $1.125-$1.215 billion from $1.10-$1.20 billion. Adjusted earnings are now projected between $3.05 and $3.35 per share, up from the previous $2.95-$3.25 range. Capital spending guidance was maintained at $380-$410 million.
LW’s Share Price Performance
Shares of this Zacks Rank #3 (Hold) company have gained 2.6% in the past three months against the industry’s 7.1% decline.
Image Source: Zacks Investment Research
Stocks to Consider
The Chefs' Warehouse, Inc. (CHEF - Free Report) distributes specialty food and center-of-the-plate products in the United States, the Middle East and Canada. At present, CHEF flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Chefs' Warehouse’s current fiscal-year sales and earnings implies growth of 10.8% and 33.7%, respectively, from the year-ago reported figures. Chefs' Warehouse delivered a trailing four-quarter earnings surprise of 30.4%, on average.
Mama's Creations, Inc. (MAMA - Free Report) manufactures and markets fresh deli-prepared foods in the United States. At present, MAMA holds a Zacks Rank of 2 (Buy). Mama's Creations delivered a trailing four-quarter earnings surprise of 121.7%, on average.
The consensus estimate for Mama's Creations’ current fiscal-year sales and earnings implies growth of 30.3% and 66.7%, respectively, from the year-ago figures.
Utz Brands (UTZ - Free Report) engages in the manufacture, marketing and distribution of snack foods in the United States. It presently carries a Zacks Rank of 2. UTZ delivered a trailing four-quarter earnings surprise of 1.8%, on average.
The Zacks Consensus Estimate for Utz Brands’ current financial-year sales indicates growth of 3.7% from the year-ago numbers.