Lamb Weston Holdings, Inc.’s top and bottom lines headed in different directions during the first quarter of fiscal 2022. Sales rose 13% as foodservice and institutional businesses recovered around the world, but the company’s net income fell 67% for the quarter, writes Keith Nunes in a news story for Food Business News.
Inflation, supply chain disruptions, labor shortages and a Pacific Northwest potato crop damaged by excessive heat this summer all combined to pressure earnings.
“Our margin improvement lags our volume recovery as a result of the timing of pricing actions to offset cost inflation as well as challenging macro factors that increase our cost and affected our production run rates and throughput,” said Thomas P. Werner, president and chief executive officer, during an Oct. 7 conference call to discuss the quarterly results.
“In the US, we continue to be encouraged by the pace of recovery in restaurant traffic and demand for fries,” Mr. Werner said. “Overall, restaurant traffic has largely stabilized at about 5% below pre-pandemic levels, led by the continued solid performance at quick-service restaurants.”
Internationally, Mr. Werner said demand in Europe, Asia and Oceania followed a similar pattern as the United States — with steady growth that tapered with the emergence of the Delta variant.
Source: Food Business News. Read the full story here
Photo: Lamb Weston Holdings, Inc.