Improved sales volumes in Lamb Weston, Inc.â€™s Global and Foodservice business units propelled the potato processorâ€™s net income up 18% during the second quarter of fiscal 2020, according to a report by Baking Business.
Net income for the quarter ended Nov. 24, 2019, totaled $140.4 million, equal to 96c per share on the common stock. It was an increase when compared with the same period of the previous year when the company earned $119 million, or 74c per share.
Quarterly sales rose 12% to $1,019.2 million. Lamb Westonâ€™s Retail unit experienced a 7% rise in sales during the quarter to $132.1 million.
â€œIn the second quarter, we delivered strong sales, volume and earnings growth across each of our core business segments by continuing to execute well across the organization,â€ said Tom Werner, president and chief executive officer. â€œWeâ€™re generating strong cash flow, and weâ€™re investing that cash back into the business to support customer growth, improve manufacturing operations and systems, and bolster our presence in key markets such as Australia and South America.â€
As a result, the company raised its guidance for the full year. Lamb Westonâ€™s sales growth rate is now expected to fall at the high-end of the mid-single digit range, and management increased the companyâ€™s EBITDA range from $950 million to $970 million from $965 million to $985 million.
The positive news is challenging management on several fronts, most notably capacity utilization to keep pace with demand and a less-than-ideal potato crop year. Despite a weak potato crop year in some parts of the world, Mr. Werner sought to reassure investors that Lamb Weston would not be adversely affected.