Lamb Weston Holdings, Inc., a supplier of frozen potato products, reported disappointing third-quarter earnings and subsequently provided a fourth-quarter revenue prediction and revised its earnings and revenue estimates for fiscal 2024, all of which fell short of market expectations.
Following these announcements, Lamb Weston shares saw a decrease of around 11.5% to trade at $89.50 in pre-market activity on the New York Stock Exchange.
For the current fiscal year, the company has readjusted its net income expectation to between $770 million and $790 million, or $5.30 to $5.45 per share. This is a significant decrease from the company's previous income target of $830 million to $900 million, or $5.70 to $6.15 per share.
The revised estimate for the company's adjusted net income has also seen a reduction, now set to be between $800 million and $820 million, or $5.50 to $5.65 per share. While this is lower than the original estimates of $830 million to $900 million, or $5.70 to $6.15 per share, it still falls short of the average prediction from analysts for earnings of $6.01 per share.
In addition to these financial revisions, Lamb Weston has also updated its annual net sales goal to a range of $6.54 billion to $6.60 billion. This includes the consolidation of LW EMEA's financial results from the first three quarters of the fiscal year, which contributed an additional $1.1 billion of incremental sales.
Previously, the company expected net sales to sit between $6.8 billion and $7.0 billion. This revision reflects the higher-than-anticipated impact on customer order fulfillment rates.
Looking ahead to the fourth quarter, Lamb Weston predicts net sales to be between $1.69 billion and $1.75 billion, a growth attributed to an increase in price and mix.
In contrast to these estimates, the predicted sales on the Street amount to $6.88 billion for the year and $1.84 billion for the fourth quarter.
Regarding Lamb Weston's third-quarter performance, the company's earnings totaled $146.1 million, or $1.01 per share. This is a decline in comparison to the $175.1 million, or $1.21 per share, acquired over the same period last year. Additionally, the company's adjusted earnings during this period were $175 million, or $1.20 per share, and its revenue rose 16.8% to $1.46 billion, up from $1.25 billion last year.
