Lamb Weston Holdings Inc., headquartered in Eagle, Idaho, reports favourable second-quarter fiscal results, with net sales of frozen potato products increasing 27 per cent to $1,277 million compared to a year ago.
“We delivered strong top and bottom-line results in the quarter,” said Tom Werner, president and CEO. “Because of our financial performance in the first half of fiscal 2023 and our broad operating momentum, we have raised our annual sales, gross margin and earnings targets. We expect the continued implementation of pricing actions to counter higher input and potato costs to drive our financial results in the second half, while our volume performance will continue to be affected by supply chain constraints and inflationary pressures on consumers.”
“In addition, we look forward to beginning to capture strategic, commercial and operational benefits from the acquisition of our partner’s interest in our European joint venture, which we currently expect to close during our fiscal fourth quarter. By leveraging a truly global production footprint, we believe Lamb Weston will be well-positioned to support customers in key markets around the world, and drive sustainable, profitable growth over the long term.”
Net sales increased $269.9 million to $1,276.5 million, up 27 per cent versus the prior year quarter. Price/mix increased 30 per cent, reflecting the benefit of product and freight pricing actions across each of the company’s core business segments to counter input, manufacturing, and transportation cost inflation. Volume declined three per cent, primarily reflecting an inability to fully serve customer demand in the company’s foodservice and retail channels.
The impact of supply chain disruptions during the quarter, including the effects of commodities shortages and onboarding new production workers, continued to affect production run-rates and throughput in the company’s production facilities as well as customer order fulfillment rates. To a lesser extent, softer casual dining and full-service restaurant traffic in the U.S. also contributed to the volume decline as consumers continue to face a challenging macroeconomic environment.
The positive outlook predicts an increase of net sales for the current year from $4.8 billion to $4.9 billion. For more details, link here: https://bit.ly/3vKVA5z
Source: Lamb Weston January 5, 2023 news release