Lamb Weston Q4 2021 Earnings Report
Key Takeaways
Lamb Weston's Q4 2021 results showed a strong recovery with net sales increasing by 19% to $1,008 million and income from operations increasing by 220% to $99 million. Diluted EPS increased to $0.44 from a loss of $0.01. The company provided a positive outlook for fiscal year 2022, expecting net sales growth above its long-term target range.
Net sales increased 19% to $1,008 million.
Income from operations increased 220% to $99 million.
Net income increased to $66 million from a loss of $2 million.
Diluted EPS increased to $0.44 from a loss of $0.01.
Lamb Weston
Lamb Weston
Forward Guidance
The Company expects fiscal 2022 net sales growth will be above its long-term target of low-to-mid single digits. Net income and Adjusted EBITDA including unconsolidated joint ventures to be pressured during the first half, and normalize in the second half
Positive Outlook
- Net sales growth will be above its long-term target of low-to-mid single digits.
- Net sales growth in the first half of fiscal year 2022 will be driven largely by higher volume, reflecting an ongoing recovery in frozen potato demand.
- Net sales growth in the second half of its fiscal year will reflect more of a balance of higher volume and improved price/mix as recent pricing actions are fully implemented in the market.
- Sales volumes in higher-margin channels approach pre-pandemic levels.
- Strong balance sheet and ability to generate cash has it well-positioned to expand production capacity to support long-term growth
Challenges Ahead
- Net income and Adjusted EBITDA including unconsolidated joint ventures to be pressured during the first half of fiscal 2022.
- Volatility in the broader supply chain as the overall economy continues to recover from the pandemic’s impact.
- Significant inflation for key production inputs, packaging and transportation compared to fiscal 2021 levels.
- Continued investments in its manufacturing, supply chain, and commercial operations will increase operating expenses in the near term.
- Ongoing impact of the pandemic is uncertain.