Lamb Weston Holdings, Inc. announced today its results for the first quarter of fiscal 2024 and raised its full year earnings targets for fiscal 2024.
“We delivered solid sales and earnings growth in the quarter, driven by the carryover benefit of pricing actions initiated last year as well as improved customer and product mix,” said Tom Werner, President and CEO. Organic sales volumes were in line with expectations, and shipment trends improved as the quarter progressed.”
“We raised our earnings target for the year to reflect our performance in the quarter, as well as the current solid demand and pricing environment. We continue to expect the potato crop in our growing regions in North America will be in line with historical averages, and we believe the overall crop in Europe has improved compared to earlier predictions as a result of better growing conditions.
“The integration of our EMEA operations and our capacity expansions also remain on track, including the start-up of our facility in China this month. With these investments, along with our strategic efforts to improve the capabilities and flexibility of our global production network and operations, we believe that we are well-positioned to continue to serve our customers and drive sustainable, profitable growth over the long term.”
Net sales increase
Lamb Weston Holdings reported a significant increase in net sales by 48%, amounting to $1,665.3 million. This surge was largely due to the consolidation of financial results from its acquisitions: Lamb-Weston/Meijer in Europe and Lamb Weston Alimentos Modernos S.A. in Argentina.
Excluding these acquisitions, net sales grew by 15%. The company implemented pricing actions to counteract rising input and manufacturing costs, resulting in a 23% increase in price/mix. However, there was an 8% decline in volume, mainly due to the company’s strategic decisions to exit specific lower-margin businesses.
Gross profit saw an increase of $226.2 million, reaching $499.5 million. This included costs related to the LW EMEA Acquisition and gains from commodity hedging contracts. Selling, general, and administrative expenses rose to $176.2 million, with a notable portion attributed to LW EMEA integration and acquisition-related expenses.
Operational income surged
The company’s operational income surged by 106%, amounting to $323.3 million. Net income stood at $234.8 million, a slight increase from the previous year, with a Diluted EPS of $1.60. Adjusted Net Income and Adjusted Diluted EPS saw significant increases, with Adjusted EBITDA rising by 76% compared to the previous year.
The company underwent a structural change, consolidating its operations into two business segments: North America and International. The North America segment reported a 19% increase in net sales, while the International segment saw a massive 212% growth, primarily due to the recent acquisitions.
Source: Lamb Weston. Read the detailed news release here
Photo: Credit Lamb Weston