LW Earnings: Lamb Weston Plunges on Weak Q4 Results and Outlook
Market News

LW Earnings: Lamb Weston Plunges on Weak Q4 Results and Outlook

Story Highlights

Lamb Weston stock dropped over 28% yesterday on weak fiscal fourth-quarter results and a disappointing outlook for Fiscal 2025.

Lamb Weston Holdings (LW), a supplier of frozen potato products, was the worst performer in the S&P 500 Index (SPX) on Wednesday. The stock declined more than 28% in the regular trading session following the release of weak fiscal fourth-quarter results and a lower-than-expected outlook for Fiscal 2025.

The company attributed its poor performance to lower pricing, declining market share, and a slowdown in restaurant traffic within the U.S. and key international markets. Importantly, CEO Tom Werner expects these challenges to persist in Fiscal 2025.

LW: Q4 Financial Highlights

The company’s net sales dropped 5% year-over-year to $1.61 billion and fell short of the analysts’ expectations of $1.7 billion. Moreover, adjusted earnings per share (EPS) decreased by 40% to $0.78, which was significantly below the Street’s estimates of $1.26 per share.

Additionally, Lamb Weston reported an 8% decline in volume, citing global weakness in restaurant demand and its exit from lower-margin businesses in Europe as key factors. The company’s inventory levels increased by 22.2% year-over-year in Q4 and put further strain on its financials.

Dim Outlook for Fiscal 2025

LW issued a cautious outlook for Fiscal 2025 due to a challenging operating environment and higher inventory levels.

The company expects to report revenues between $6.6 billion and $6.8 billion, compared with analysts’ estimates of $6.79 billion. Further, LW anticipates that earnings will fall in the range of $4.35 to $4.85 per share, below the consensus estimates of $6.10 per share.

Is LW Stock a Good Buy?

On TipRanks, it has a Strong Buy consensus rating based on six Buy and one Hold ratings. The analysts’ average price target on LW stock of $90.67 implies 60.7% upside potential. Shares of the company have declined by about 32% in the past three months.

It should be noted that the price target might change due to a significant drop in LW stock price yesterday. After the earnings release, two analysts have already reduced their targets, as seen in the image below.

See more LW analyst ratings

Disclosure

Related Articles
TheFlyLamb Weston price target raised to $80 from $65 at Stifel
TheFlyLamb Weston price target raised to $88 from $77 at Wells Fargo
TheFlyLamb Weston price target raised to $90 from $76 at Citi
Go Ad-Free with Our App