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Aug 27, 2023
Lamb Weston Q1 2024 Earnings Report
Lamb Weston's Q1 2024 results reflected solid sales and earnings growth, driven by pricing actions and improved customer mix, with shipment trends improving as the quarter progressed.
Key Takeaways
Lamb Weston reported a strong first quarter in fiscal 2024, with net sales increasing by 48% to $1,665.3 million and income from operations increasing by 106% to $323.3 million. The company raised its full year earnings targets for fiscal 2024.
Net sales increased 48% to $1,665 million, including $375 million from acquisitions.
Income from operations increased 106% to $323 million.
Adjusted diluted EPS increased 109% to $1.63 from $0.78.
The company raised its financial targets for fiscal year 2024.
Lamb Weston
Lamb Weston
Lamb Weston Revenue by Segment
Lamb Weston Revenue by Geographic Location
Forward Guidance
The Company raised its financial targets for fiscal 2024, including net sales of $6.8 billion to $7.0 billion and Adjusted EBITDA of $1,540 million to $1,620 million.
Positive Outlook
- Net sales of $6.8 billion to $7.0 billion, including $1.1 billion to $1.2 billion of incremental sales attributable to the consolidation of the financial results of LW EMEA during the first three quarters of the fiscal year.
- Net sales, excluding incremental sales attributable to the LW EMEA Acquisition, to grow 6.5 percent to 8.5 percent, and to be largely driven by pricing actions.
- Net income of $800 million to $870 million and Diluted EPS of $5.47 to $5.92, including a net loss from foreign currency exchange and unrealized mark-to-market derivative gains and losses and items impacting comparability of $6.6 million ($4.7 million after-tax, or $0.03 per share) during the first quarter of fiscal 2024.
- Adjusted Net Income of $805 million to $875 million
- Adjusted EBITDA of $1,540 million to $1,620 million
Challenges Ahead
- Sales volumes are expected to be primarily pressured by the Company’s decisions to strategically manage customer and product mix by exiting certain lower-priced and lower-margin business.
- Softening restaurant traffic trends in the U.S. and other key markets due to macroeconomic headwinds may also pressure volumes.
- Gross profit growth will be partially offset by higher SG&A of $765 million to $775 million.
- Increased investments to upgrade the Company’s information systems and ERP infrastructure.
- Non-cash amortization of intangible assets associated with the LW EMEA Acquisition; and higher compensation and benefits expense due to increased employee headcount.
Revenue & Expenses
Visualization of income flow from segment revenue to net income