Q1 FY2027
Filed Oct 6, 2026Lamb Weston Announces First Quarter Fiscal 2027 Results Above Guidance Increases Full-Year 2027 Outlook for Net Sales, Adjusted Diluted EPS and Adjusted EBITDA
Net sales increased and North America volume and Segment Adjusted EBITDA improved, but total Adjusted EBITDA declined, reported net income fell, and International sales and Segment Adjusted EBITDA declined sharply amid difficult EMEA conditions and higher manufacturing costs.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net salesGAAP | $1.67B | – | 0.7% |
| Net sales excluding FXnon-GAAP | $1.67B | – | — % |
| Sales volume changeother | 2.2% | – | 2.2% |
| Price/mix changeother | (1.8%) | – | (1.8%) |
| FX changeother | 0.3% | – | 0.3% |
| Cost of salesGAAP | $1.40B | – | – |
| Gross profitGAAP | $266.5M | – | – |
| Adjusted Gross Profitnon-GAAP | $316.8M | – | – |
| Selling, general and administrative expensesGAAP | $170.2M | – | – |
| Adjusted SG&Anon-GAAP | $139.2M | – | – |
| Cost Savings Program and Restructuring expensesGAAP | $14.1M | – | – |
| Income from operationsGAAP | $82.2M | – | – |
| Adjusted Income from Operationsnon-GAAP | $177.6M | – | – |
| Interest expense, netGAAP | $42.4M | – | – |
| Income tax expenseGAAP | $16.9M | – | – |
| Equity method investment earnings (loss)GAAP | $6.2M | – | – |
| Net incomeGAAP | $29.1M | – | (55)% |
| Adjusted Net Incomenon-GAAP | $102.9M | – | flat |
| Diluted EPSGAAP | $0.21 | – | (54)% |
| Adjusted Diluted EPSnon-GAAP | $0.75 | – | 1% |
| Adjusted EBITDAnon-GAAP | $285.6M | – | (5)% |
| Net cash provided by operating activitiesGAAP | $234.8M | – | – |
| Additions to property, plant and equipmentGAAP | −$88.7M | – | – |
| Net cash used for investing activitiesGAAP | −$90.9M | – | – |
| Net cash used for financing activitiesGAAP | −$46.3M | – | – |
| Cash and cash equivalentsGAAP | $166.3M | – | – |
| Short-term borrowingsGAAP | $279.3M | – | – |
| Current portion of long-term debt and financing obligationsGAAP | $70.8M | – | – |
| Long-term debt and financing obligations, excluding current portionGAAP | $3.58B | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| North AmericaSales volume increased 6.7%, driven by higher demand from existing customers and customer wins. Price/mix declined 1.7% from price and trade support for customers and continued mix shift toward faster-growing chain customers and private-label products. Segment Adjusted EBITDA was $287.3 million, up 11%, supported by higher sales volumes, cost savings initiatives, $5 million in tariff refunds, and higher equity method investment earnings. | $1.14B | – | 5.2% |
| InternationalSales volume declined 6.4% and price/mix declined 2.0%. Segment Adjusted EBITDA was $26.5 million, down 54%, due to lower sales volume and net sales mostly in Europe and higher manufacturing costs per pound, including prior-year higher potato costs, factory underutilization, and inflation. | $528.9M | – | (8.0%) |
Fiscal 2027 Updated outlook
- RevenueUp Low Single Digits
- Tax rateapproximately 25.0% to 27.0%, excluding the impact of comparability items
- NoteAdjusted EBITDA: $1.125 to $1.215 billion
- NoteAdjusted Diluted EPS: $3.05 to $3.35
- NoteCapital expenditures: $380 to $410 million
- NoteCapital expenditures on an accrual basis: approximately $330 to $350 million
- NoteAdjusted Income from Operations: $730 million to $810 million
- NoteDepreciation and amortization expense: approximately $410 million
- NoteInterest expense, net: approximately $185 million to $190 million
- NoteDiluted outstanding common shares: 137.5 million to 139.0 million
- NoteNet cash provided by operating activities: $750 million to $800 million
Capital returns
- Returned $52 million to shareholders through cash dividends in the first quarter of fiscal 2027.
- The Company did not repurchase any shares during the first quarter of fiscal 2027.
- Approximately $245 million remains authorized and available for repurchase under the Company's share repurchase program.
- The Board of Directors declared a quarterly dividend of $0.38 per share on October 5, 2026, payable on December 4, 2026, to shareholders of record as of the close of business on November 6, 2026.
- Dividends declared per common share were $0.38, compared with $0.37 in the prior-year period.
What drove it
- Total net sales increased 1 percent due to a 2 percent increase in sales volume and an immaterial favorable currency impact, partially offset by a 2 percent decrease in price/mix.
- North America sales volume grew for the seventh consecutive quarter.
- Ongoing cost savings mostly offset increases in outside services and fixed expense.
- Capacity optimization initiatives in North America have led to an approximate 10 percentage point increase in utilization.
- The Company ended production at Broekhuizenvorst and transitioned customer fulfillment within Lamb Weston's network to enable further cost optimization.
- The Company raised its Fiscal 2027 outlook for net sales, Adjusted EBITDA, and Adjusted Diluted EPS.
Concerns
- International net sales declined 8 percent and International Segment Adjusted EBITDA declined 54 percent.
- EMEA continues to face challenging market conditions.
- Total manufacturing cost per pound increased mostly due to the International segment and EMEA performance.
- The Company cited unexpected inflationary pressure across key input costs and freight expense.
- Reported net income declined by $35 million.
- Selling, general and administrative expenses increased primarily due to lapping $7 million of non-recurring miscellaneous income in the first quarter fiscal 2026.
What to watch
- Delivery of the updated Fiscal 2027 Adjusted EBITDA outlook of $1.125 to $1.215 billion.
- International volume, price/mix, manufacturing cost per pound, and EMEA market conditions.
- Execution of supplier actions and hedging intended to address input-cost and freight inflation.
- Benefits from North America capacity optimization, the Cost Savings Program, and network optimization.
- The Focus to Win roadmap expected to be shared at the Investor Day in early calendar 2027.
- Net cash provided by operating activities against the Fiscal 2027 target of $750 million to $800 million.
Balance sheet and cash flow
- Cash provided by operating activities was $235 million and decreased $117 million compared to the prior-year period.
- Current-quarter cash provided by operating activities benefited by $59 million from an increase in accounts payable.
- Capital expenditures were $91 million during the first quarter of fiscal 2027, up $12 million from the prior-year period.
- Cash and cash equivalents were $166 million as of August 30, 2026, an increase of $98 million compared to the end of fiscal year 2026.
- Additional available liquidity under the revolving credit facility was $1.24 billion.
- Accounts payable were $631.1 million as of August 30, 2026, compared with $613.1 million as of May 31, 2026.
Analysis
Lamb Weston opened fiscal 2027 with $1,670.3 million of net sales, up 0.7% from $1,659.3 million. The result reflected 2.2% sales-volume growth and a 0.3% FX contribution, offset by a 1.8% decline in price/mix. Management characterized first-quarter net sales and profit as above expectations and increased its full-year outlook for net sales, Adjusted EBITDA, and Adjusted Diluted EPS.
North America supplied the growth. Segment sales rose 5.2% to $1,141.4 million as volume grew 6.7%, supported by demand from existing customers and customer wins. The segment's $287.3 million of Adjusted EBITDA rose 11%, with higher volume, cost savings, $5 million in tariff refunds, and higher equity method investment earnings more than offsetting customer price and trade support, mix effects, and input-cost inflation.
International remained the material drag. Segment sales fell 8.0% to $528.9 million, with volume down 6.4% and price/mix down 2.0%. International Segment Adjusted EBITDA dropped 54% to $26.5 million amid lower European sales, prior-year higher potato costs carried into the period, factory underutilization, and inflation. The company also identified continued challenging EMEA market conditions, although it said Segment Adjusted EBITDA improved sequentially as it worked through crop carry-in costs.
Consolidated profitability weakened on a reported basis. Gross profit was $266.5 million versus $342.4 million, income from operations was $82.2 million versus $156.5 million, and net income was $29.1 million versus $64.3 million. Adjusted Net Income was essentially unchanged at $102.9 million versus $103.0 million, while Adjusted EBITDA declined 5% to $285.6 million. The reconciliation includes $33.0 million of legal proceedings and other claims and $34.2 million of Cost Savings Program, Restructuring Plan, and other expenses.
Cash generation declined, with net cash provided by operating activities of $234.8 million versus $352.0 million, although the current quarter benefited from a $59.2 million increase in accounts payable. Cash and cash equivalents were $166.3 million at August 30, 2026, and the company cited $1.24 billion of additional revolving-credit-facility liquidity. Lamb Weston returned $52 million through cash dividends, made no share repurchases, and declared a $0.38-per-share quarterly dividend. The updated fiscal 2027 outlook calls for net sales up low single digits, Adjusted EBITDA of $1.125 to $1.215 billion, and Adjusted Diluted EPS of $3.05 to $3.35.
Management, verbatim
We are off to a solid start to the year, delivering first quarter net sales and profit above our expectations.
Mike Smith, president and chief executive officer
Our first quarter results were driven by continued momentum in North America where our strong customer relationships fueled sales volume growth and we continued to drive cost savings.
Mike Smith, president and chief executive officer
We continue to experience unexpected inflationary pressure across key input costs and freight expense.
Mike Smith, president and chief executive officer
Not in the filing
stated, not guessed- Gross margin was not reported.
- Adjusted EBITDA margin was not reported.
- Free cash flow was not reported.
- A separate previous-release outlook was not provided for row-for-row comparison with reported results.
- Prior-quarter figures were not reported for the income-statement metrics.
- Year-over-year percentage changes were not reported for several consolidated income-statement and cash-flow line items.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.