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The Key Takeaways
- Lamb Weston named a new chief executive officer on Thursday, as the manufacturer of frozen fries suffered a second-quarter surprise loss and lowered its guidance for fiscal 2025.
- Analysts expected a profit in the second quarter of $88.0 millions, or $0.61 a share. The Idaho-based firm reported a loss of 36.1 million dollars, or 0.25 cents per share.
- Lamb Weston’s shares dropped by almost 20 percent in the premarket.
Stocks of Lamb Weston, the company that makes frozen fries, plunged by nearly 20 percent in Thursday’s premarket trade after it unexpectedly posted a loss. It also cut its fiscal guidance to 2025 and hired a Chief Executive Officer.
VisibleAlpha polled its analysts and they expected an $88.0 million profit, which is $0.61 per common share. A revenue of $1.6 billion was below the expectations.
Lamb Weston released a press release stating that Michael J. Smith (current Chief Operating Officer) would be taking over Tom Werner’s CEO position, starting Jan. 3, 2019. Werner is also being replaced by Smith in the Board. “will serve in an advisory role through August 31, 2025 to ensure a smooth transition,” The company stated.
Lamb Weston Reduces Fiscal 2020 Outlook
It has lowered its targets for fiscal 2025, now projecting sales between $6.35 and $6.45 billion. Earnings per share (EPS), which are calculated as earnings of $2.30 or $2.45 each, will be projected at $2.30-$2.45. Adjusted EPS, however, is expected to range from $3.05 to $4.35. It guided sales between $6.6 and $6.8 billion in the third quarter. Earnings per share (EPS) were $2.70 to £3.15. Adjusted EPS was $4.15 – $4.35.
"In terms of the broader operating environment, we expect challenging conditions to persist through the remainder of fiscal 2025 and into fiscal 2026, driven primarily by an accelerating rate of capacity additions and continued near-term softening of global frozen potato demand below historical rates, particularly outside North America, until demand trends improve and capacity expansion normalizes," Werner said.
The shares of Lamb Weston were down almost 28% for the past year as of Wednesday. They fell another 18% during premarket trading.
UPDATE—This story has been updated with the new CEO appointment and the latest share price.
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