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Feb 23, 2020
Lamb Weston Q3 2020 Earnings Report
Lamb Weston's Q3 2020 results were announced, revealing mixed performance with sales growth offset by higher costs and the initial impact of COVID-19, leading to a withdrawn fiscal year 2020 outlook.
Key Takeaways
Lamb Weston's Q3 2020 net sales increased 1% to $937 million, but income from operations declined 16% to $163 million. The company withdrew its fiscal year 2020 outlook due to uncertainties from the COVID-19 pandemic.
Net sales increased 1% to $937 million.
Income from operations decreased 16% to $163 million.
Net income decreased 21% to $111 million.
The company withdrew its fiscal year 2020 outlook due to COVID-19 uncertainties.
Lamb Weston
Lamb Weston
Forward Guidance
Lamb Weston has withdrawn its financial outlook for fiscal year 2020 due to the unpredictable impact of the COVID-19 pandemic on the global economy and restaurant traffic. The company continues to expect interest expense of approximately $110 million, an effective tax rate of approximately 24 percent, and depreciation and amortization of approximately $175 million. The company reduced its target for capital expenditures to approximately $200 million from approximately $300 million.
Positive Outlook
- Expects interest expense of approximately $110 million.
- Expects an effective tax rate of approximately 24 percent.
- Expects depreciation and amortization of approximately $175 million.
- Reduced capital expenditures target to approximately $200 million from $300 million.
Challenges Ahead
- Withdrew financial outlook for fiscal year 2020.
- Cites unpredictable impact of COVID-19 pandemic.
- Uncertainty in restaurant traffic in North America.
- Uncertainty in key international markets.