Lamb Weston Reports Decline in Net Sales and Net Income for Fiscal Year 2025

Lamb Weston Holdings, Inc. reported a slight decline in net sales for the fiscal year ending May 25, 2025, totaling $6.45 billion, down from $6.47 billion in the previous year. The North America segment experienced a 2% decrease in sales, amounting to $4.27 billion, while the International segment saw a 4% increase, reaching $2.19 billion. The overall decline in revenue was attributed to a 2% drop in price/mix, which was partially offset by a 2% increase in volume, particularly in the International segment. The company faced ongoing inflationary pressures that contributed to lower restaurant traffic and reduced demand for frozen potato products.

In terms of profitability, Lamb Weston reported a net income of $357.2 million, a significant decrease from $725.5 million in the prior fiscal year. This decline was influenced by a $100 million restructuring expense related to the FY25 Restructuring Plan, which included the permanent closure of a manufacturing facility and other operational adjustments. Adjusted EBITDA also fell to $1.22 billion, down from $1.42 billion in fiscal 2024, reflecting increased manufacturing costs and the impact of the restructuring efforts.

Strategically, Lamb Weston has initiated a new Cost Savings Program aimed at achieving at least $250 million in annualized savings by the end of fiscal 2028. This program is expected to include headcount reductions of approximately 4% of the global workforce and is designed to enhance operational efficiency. The company also plans to generate around $120 million in working capital improvements by the end of fiscal 2027. The restructuring plan and cost savings initiatives are part of a broader strategy to adapt to changing market conditions and improve financial performance.

Operationally, Lamb Weston maintained a workforce of approximately 10,100 employees, with about 3,100 based outside the U.S. The company operates 26 production facilities globally, with 14 located in the U.S. and 12 in other countries. The company’s largest customer, McDonald’s Corporation, accounted for approximately 15% of net sales in fiscal 2025. Despite facing challenges such as increased commodity costs and competitive pressures, Lamb Weston continues to focus on innovation and customer partnerships to drive growth in both domestic and international markets.

Looking ahead, Lamb Weston anticipates continued pressure on consumer spending due to macroeconomic factors, with global restaurant traffic expected to remain stable compared to fiscal 2025 levels. The company expects to benefit from a 53rd week in fiscal 2026, which will contribute to sales volume. However, earnings are projected to decline further due to ongoing input cost increases and the impact of new investments. The company remains committed to executing its strategic initiatives to enhance operational efficiency and drive long-term growth.