Sluggish sales of French fry products are forcing Lamb Weston to restructure further. The publicly traded potato processor aims to save another $250 million amid persistently under-pressure results. Profit halved in the fiscal year that ended last quarter. However, the past two quarters were less bad than expected. For the coming fiscal year,...
For the full fiscal year 2025, US-based Lamb Weston achieved revenues of $6,4 billion, the same as in 2024. Net profit fell 51% to a mere $357 million. Results improved somewhat in the final quarter, with slightly higher revenues and a less sharp decline in profit compared to the same period in 2024. Sales volumes also increased slightly.
Better than expected
According to CEO Mike Smith, results in the second half of 2025 were better than expected. He's a recent hire, and his task is to reverse the disappointing results. His goal is to save at least $250 million in the coming years, partly to improve working capital. He believes Lamb Weston could be more aggressive and regain market share. This will come in the form of new customers to generate additional sales.
Market remains difficult
This will also be necessary to pull the company out of the doldrums, as the global sales market for French fries is likely to remain challenging. Macroeconomic factors are putting pressure on consumer spending, and thus also on restaurant visits. However, the company does not expect results to deteriorate further. The forecast for revenue and profit for 2026 is therefore the same as for the previous fiscal year, with the caveat that this does not take into account any potential impact of trade tariffs.
Investors are pleased that Lamb Weston believes it has found a bottom after a string of poor results. The share price had fallen below $50 per share in recent months, its lowest since 2017. After the results were released yesterday, the share price rebounded to above $55.