Lockdown affects result Lamb Weston

The corona crisis has had an impact on the results of American French fries giant Lamb Weston. Although there is currently some recovery, according to the French fries manufacturer, this is still very fragile. This is due to the unpredictable effects of the global pandemic.

The publicly traded Lamb Weston reported yesterday (July 28) the results for the fourth quarter and also the results for the closed broken financial year. It can be concluded from this that the French fries concern is in difficult waters. Net income plummeted $112 million in the fourth quarter to a loss of $2 million. This on revenue of $847 million, which was 16% lower than the same period last year. 

Viewed over the whole broken financial year, the figures are obviously less negative. With a virtually unchanged turnover of $3,7 billion, the bottom line was $366 million, a quarter less than the previous fiscal year. While the poorer results should come as no surprise, the poorer results apparently shocked investors. The share price fell 12% to $61.   

Lockdown is coming hard
The financial headwind is due to the corona crisis. The French fries manufacturer derives most of its turnover from the food service, which was closed in many countries to limit the spread of the corona virus. The company normally generates 10% of its annual revenues through fast-foot chain McDonald's alone, which has closed many restaurants in the US. 

The food service reopened cautiously in June and July and the company's turnover also increased somewhat. Sales on the American home market are now approximately 85% of their sales over the same period last year. The sales of Lamb-Weston/Meijer, the European branch of Lamb Weston, are approximately 75% of the sales achieved last year.

Lamb Weston is cautious for the new financial year. The recovery is said to be very fragile. Concrete expectations are not given, but the company does say that it is difficult to deal with the unpredictable corona pandemic. 

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