Lamb Weston, a major supplier of frozen french fries to global chains like McDonald’s, KFC, Taco Bell and others, has named a new CEO after posting a surprise loss in the second quarter as consumers pull back on the money they spend on food outside the home.
But struggles at the Lamb Weston, which produces the equivalent of 80 million servings of fries every day worldwide, have been no secret on Wall Street and its shares have tumbled more than 40% this year, writes Michelle Chapman in a news story published by Yahoo News! Shares slumped more than 23% on Thursday.
In need of new leadership
Chapman says that in October of this year the Idaho company announced job cuts and said it would close a plant and cut production as demand sagged. Lamb Weston has more than 10,000 employees worldwide.
One of the company’s biggest investors said in a letter to the company this week that Lamb Weston needed new leadership citing what it saw as major mistakes, including a failure to see an erosion in demand as people cut back on dining out.
In a news release, Lamb Weston announced today the appointment of Michael J. Smith, current Chief Operating Officer of Lamb Weston, as President and Chief Executive Officer and as a member of the company’s Board of Directors, effective January 3, 2025.
Mr. Smith succeeds Thomas P. Werner, who is stepping down as CEO and as a member of the Board. Mr. Werner will serve in an advisory role through August 31, 2025 to ensure a smooth transition.
Jana Partners, the investor company that sent a letter to Lamb Weston on Monday, reportedly cited a litany of complaints that included “chronic mis-execution, a bloated expense structure” and poor spending choices.
A key leader
According to the Lamb Weston news release, Smith joined Lamb Weston in 2007 and has served in increasingly senior leadership roles during his 17-year career at the company. Throughout Mr. Smith’s tenure at Lamb Weston, he has been a key leader, driving strong growth across multiple areas of the company.
W.G. Jurgensen, Chairman of the Board of Lamb Weston said, “We are pleased to have Mike Smith lead Lamb Weston through the next phase of the company’s growth. Mike’s appointment represents the culmination of a thoughtful, years-long succession planning process by our Board, and we are confident he is the right leader to guide Lamb Weston forward.
“Mike has developed a deep understanding of all critical aspects of our business and commercial operations. He will also bring a fresh perspective to the role along with a blend of strategic thinking and a laser focus on capturing current market and operational opportunities, as well as a deep appreciation for our employees, customers and partners.”
Working to deliver profitable growth
Mr. Smith said, “I am honored to be appointed CEO and look forward to continuing to work alongside our talented team here at Lamb Weston. Together, we will work to deliver profitable growth and build on Lamb Weston’s position as a global leader in frozen potato products.
“I am excited about the opportunities ahead for our company and believe that our unwavering focus on customer satisfaction, operational excellence and continued innovation will enable us to enhance value for our shareholders. Importantly, I also want to extend my gratitude to Tom for his commitment, leadership and passion for Lamb Weston and its employees.”
Mr. Werner said, “It has been a privilege to lead Lamb Weston. I am proud of what we have accomplished, and I want to express my thanks to the many team members who, through their hard work and commitment to the company, have made our success possible. Given all that we achieved together, and the journey yet ahead, the Board and I agreed it is the right time to enact our succession plans and allow a new leader to guide the company.
“I have worked closely with Mike and witnessed first-hand his values-based leadership style and steadfast focus on people as well as his thorough, enterprise-wide understanding of the business. I am confident that the Lamb Weston team is well-positioned for the future under his leadership.”
Source: Lamb Weston Holdings. Original release here
Source: Yahoo News!
Cover image: Credit Lamb Weston
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