- Lamb Weston's profits soared as the potato processor benefited from higher prices.
- Net income and earnings per share more than doubled in the quarter from last year, and sales grew 48%.
- The company raised its revenue and earnings per share outlook for the entire company. 39;year.
Lamb Weston Holdings (LW) was the best-performing stock in the S&P 500 on Thursday after the food processor posted a sharp rise in profit and raised its outlook as it benefited from higher prices.
The maker of frozen fries and other potato products said its net profit in the first quarter of fiscal 2024 soared 111% year over year to $240 million. Earnings per share (EPS) jumped 109% to $1.63 and revenue rose 48% to $1.67 billion. Both beat analyst estimates.
CEO Tom Werner credited the gains to “the residual benefit of the pricing actions launched last year as well as the improvement in the customer and product mix”.
The company said it achieved a price/mix gain of 23%, reflecting the benefits of higher pricing, the timing of North America commercial spend and a favorable mix.
Lamb Weston now forecasts sales annual revenues of between $6.8 billion and $7 billion, up from its previous forecast of $6.7 billion to $6.9 billion. It expects EPS of between $5.47 and $5.92, compared to its prior guidance of $4.95 to $5.40.
Shares of Lamb Weston Holdings jumped 8% following the news. They had been falling steadily since reaching an all-time high in July.