Lamb Weston Reports Q3 Net Income of $146M, Restructuring Plan Underway

Lamb Weston Holdings, Inc. reported its financial results for the thirteen and thirty-nine weeks ended February 23, 2025, revealing a net income of $146.0 million for the third quarter, a slight decrease from $146.1 million in the same period last year. For the first three quarters of fiscal 2025, net income fell to $237.3 million from $595.8 million in the prior year. The company’s net sales for the third quarter increased by 4% to $1.52 billion, driven by a 9% rise in volume, although this was partially offset by a 5% decline in price/mix due to competitive pricing strategies. Year-to-date, net sales decreased by 2% to $4.78 billion, reflecting challenges in the market, including soft global restaurant traffic.

The company has been undergoing a restructuring plan aimed at improving operational efficiency and cash flow, which includes the permanent closure of a manufacturing facility and temporary curtailment of production lines. For the thirteen weeks ended February 23, 2025, Lamb Weston recorded $10.3 million in restructuring expenses, while total pre-tax charges related to the restructuring plan reached $169.4 million for the first three quarters. The restructuring is expected to yield approximately $55 million in pre-tax cost savings and reduce working capital in fiscal 2025.

Operationally, Lamb Weston has seen a decline in its North America segment, with net sales dropping 3% to $3.16 billion for the first three quarters, attributed to customer volume losses and softening restaurant traffic. Conversely, the International segment reported a slight increase in net sales to $1.61 billion, supported by contract wins in key markets despite challenges in Europe. The company’s gross profit for the first three quarters was $1.06 billion, down from $1.38 billion in the previous year, impacted by higher manufacturing costs and unfavorable price/mix.

Looking ahead, Lamb Weston anticipates slightly higher sales volumes in the fourth quarter, primarily driven by growth in its International segment. However, the company expects costs per pound to rise due to seasonal trends and increased maintenance and curtailment-related downtime. The recent introduction of tariffs on U.S. imports is not expected to significantly impact the company’s financial results, as a portion of its inputs sourced from Canada are exempt under the USMCA agreement. Lamb Weston remains focused on executing its restructuring plan and enhancing operational efficiencies to navigate the current market challenges.