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Feb 25, 2024
Lamb Weston Q3 2024 Earnings Report
Lamb Weston's financial results for Q3 2024 were reported, impacted by ERP transition and excess raw potatoes write-off, leading to reduced sales and earnings guidance for fiscal year 2024.
Key Takeaways
Lamb Weston's Q3 2024 results were negatively impacted by a new ERP system transition in North America, leading to reduced visibility of finished goods inventories and affecting customer order fulfillment. Net sales increased by 16% to $1,458.3 million, but excluding the LW EMEA Acquisition, net sales decreased by 12%. The company updated its fiscal year 2024 outlook, lowering net sales, net income, and Adjusted EBITDA targets.
Net sales increased 16% to $1,458 million, including $357 million from the LW EMEA Acquisition.
Income from operations declined 16% to $224 million.
Adjusted Income from Operations declined from $269 million to $263 million.
The ERP transition negatively impacted fiscal third quarter net income by approximately $72 million and Adjusted EBITDA by approximately $95 million.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
Lamb Weston updated its financial targets for fiscal 2024, including net sales, net income, Adjusted EBITDA, and capital expenditures.
Positive Outlook
- Targeting net sales of $1.69 billion to $1.75 billion in fiscal fourth quarter.
- Growth versus prior year quarter driven by higher price/mix.
- Targeting Adjusted EBITDA of $350 million to $375 million in fiscal fourth quarter.
- Expect higher net sales and Adjusted Gross Profit to drive earnings growth.
- Maintaining targets for depreciation and amortization expense of approximately $300 million and interest expense of approximately $140 million.
Challenges Ahead
- Annual net sales target range updated to $6.54 billion to $6.60 billion from $6.8 billion to $7.0 billion.
- Net income target ranges updated to $770 million to $790 million from $830 million to $900 million.
- Diluted EPS target updated to $5.30 to $5.45 from $5.70 to $6.15.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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