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Nov 24, 2019
Lamb Weston Q2 2020 Earnings Report
Lamb Weston delivered strong sales, volume and earnings growth across all core business segments.
Key Takeaways
Lamb Weston's fiscal second quarter 2020 results showed strong sales, volume, and earnings growth across each core business segment. Net sales increased by 12% to $1,019 million, income from operations increased by 11% to $194 million, and net income increased by 18% to $140 million. The company also updated its fiscal year 2020 outlook, expecting net sales to increase at the high end of its mid-single digit growth estimate and adjusted EBITDA to be $965 million-$985 million.
Net sales increased 12% to $1,019 million.
Income from operations increased 11% to $194 million.
Net income increased 18% to $140 million.
Adjusted Diluted EPS increased 19% to $0.95 from $0.80.
Forward Guidance
The Company is updating its fiscal 2020 outlook, which includes the contribution of a 53rd week in the fiscal 2020 period, with the additional week falling in the fourth quarter, as follows: FY 2020 Outlook Summary Net sales growth rate High end of Mid-Single Digit Range Adjusted EBITDA including unconsolidated joint ventures(1) $965 million to $985 million
Positive Outlook
- Net sales to grow at the high end of the mid-single digit range, largely driven by volume as well as modestly higher price/mix.
- Adjusted EBITDA including unconsolidated joint ventures in the range of $965 million to $985 million, an increase from the Company’s previous estimate of $950 million to $970 million.
- Volume-driven gross profit growth, with higher price/mix offsetting input cost inflation;
- Equity method investment earnings to improve versus fiscal 2019, reflecting the effects of lower raw potato costs in Europe.
- An effective tax rate of approximately 24 percent versus the Company’s previous estimate of 23 to 24 percent.
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