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Things You Must Know Ahead of Lamb Weston's (LW) Q3 Earnings
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Lamb Weston Holdings, Inc. (LW - Free Report) is scheduled to release third-quarter fiscal 2020 results on Apr 1. Notably, the company delivered a positive earnings surprise of 11.8% in the last reported quarter. Also, it has trailing four-quarter positive earnings surprise of 7.3%, on average.
The Zacks Consensus Estimate for fiscal third-quarter earnings is pegged at 93 cents per share, which suggests a 2.1% decline from the year-ago quarter’s reported figure. Notably, the consensus mark has moved down by 3.1% in the past 30 days. The consensus mark for revenues is at $957 million, which suggests a 3.3% rise from the year-ago quarter’s reported figure.
Lamb Weston is benefitting from roust price/mix as well as strength in the Global segment. The segment has been benefiting from increased sales for a while, courtesy of volume gains and improved price/mix. Apart from this, Lamb Weston’s limited time offers or LTO innovations enhance its prospects. Incidentally, LTOs boosted growth and market share gains in fiscal 2019. Moreover, LTOs are aiding volume growth in the Global segment. In its last earnings call, management was optimistic about further prospects from new LTOs.
Further, Lamb Weston has been undertaking initiatives to boost offerings and operating capacity. During the second quarter of fiscal 2020, the BSW buyout (concluded in mid-fiscal 2019) contributed nearly 4 cents to the bottom line and drove overall volumes. Gains from this buyout were particularly witnessed in the Global segment. Speaking on capacity expansion endeavors, the company completed the expansion of a facility located at Hermiston, OR in June 2019. The expansion has facilitated the addition of a new processing line for increasing the production of frozen french fries. Management expects contributions from Oregon facility expansion to volumes in fiscal 2020. These upsides, which have been driving Lamb Weston’s top line for a while, are likely to have made an impact in the quarter to be reported.
However, Lamb Weston has been witnessing cost increases for input materials and manufacturing. In the last reported quarter, rise in manufacturing costs were caused by costs stemming from maintenance and other related costs along with depreciation associated with the company’s french fry production line in Oregon. Incidentally, the company expects increased input and manufacturing costs in fiscal 2020. This along with rising SG&A costs and challenges in Europe is likely to have affected the company’s performance in the quarter under review. Markedly, poor potato crop scenario in Europe has been a hurdle for Lamb Weston for a while.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Lamb Weston this time around. 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. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Lamb Weston carries a Zacks Rank #3 (Hold) and an Earnings ESP of -1.43%.
Stocks With Favorable Combinations
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat.
Kimberly-Clark (KMB - Free Report) has an Earnings ESP of +1.76% and a Zacks Rank #3.
Helen of Troy (HELE - Free Report) currently has an Earnings ESP of +0.78% and a Zacks Rank of 3.
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Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early. See Zacks' 3 Best Stocks to Play This Trend >>
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Things You Must Know Ahead of Lamb Weston's (LW) Q3 Earnings
Lamb Weston Holdings, Inc. (LW - Free Report) is scheduled to release third-quarter fiscal 2020 results on Apr 1. Notably, the company delivered a positive earnings surprise of 11.8% in the last reported quarter. Also, it has trailing four-quarter positive earnings surprise of 7.3%, on average.
The Zacks Consensus Estimate for fiscal third-quarter earnings is pegged at 93 cents per share, which suggests a 2.1% decline from the year-ago quarter’s reported figure. Notably, the consensus mark has moved down by 3.1% in the past 30 days. The consensus mark for revenues is at $957 million, which suggests a 3.3% rise from the year-ago quarter’s reported figure.
Lamb Weston Holdings Inc. Price and EPS Surprise
Lamb Weston Holdings Inc. price-eps-surprise | Lamb Weston Holdings Inc. Quote
Key Factors
Lamb Weston is benefitting from roust price/mix as well as strength in the Global segment. The segment has been benefiting from increased sales for a while, courtesy of volume gains and improved price/mix. Apart from this, Lamb Weston’s limited time offers or LTO innovations enhance its prospects. Incidentally, LTOs boosted growth and market share gains in fiscal 2019. Moreover, LTOs are aiding volume growth in the Global segment. In its last earnings call, management was optimistic about further prospects from new LTOs.
Further, Lamb Weston has been undertaking initiatives to boost offerings and operating capacity. During the second quarter of fiscal 2020, the BSW buyout (concluded in mid-fiscal 2019) contributed nearly 4 cents to the bottom line and drove overall volumes. Gains from this buyout were particularly witnessed in the Global segment. Speaking on capacity expansion endeavors, the company completed the expansion of a facility located at Hermiston, OR in June 2019. The expansion has facilitated the addition of a new processing line for increasing the production of frozen french fries. Management expects contributions from Oregon facility expansion to volumes in fiscal 2020. These upsides, which have been driving Lamb Weston’s top line for a while, are likely to have made an impact in the quarter to be reported.
However, Lamb Weston has been witnessing cost increases for input materials and manufacturing. In the last reported quarter, rise in manufacturing costs were caused by costs stemming from maintenance and other related costs along with depreciation associated with the company’s french fry production line in Oregon. Incidentally, the company expects increased input and manufacturing costs in fiscal 2020. This along with rising SG&A costs and challenges in Europe is likely to have affected the company’s performance in the quarter under review. Markedly, poor potato crop scenario in Europe has been a hurdle for Lamb Weston for a while.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Lamb Weston this time around. 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. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Lamb Weston carries a Zacks Rank #3 (Hold) and an Earnings ESP of -1.43%.
Stocks With Favorable Combinations
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat.
Church & Dwight (CHD - Free Report) currently has an Earnings ESP of +8.40% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kimberly-Clark (KMB - Free Report) has an Earnings ESP of +1.76% and a Zacks Rank #3.
Helen of Troy (HELE - Free Report) currently has an Earnings ESP of +0.78% and a Zacks Rank of 3.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>