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May 29, 2022
Lamb Weston Q4 2022 Earnings Report
Lamb Weston's Q4 2022 results reflected a strong finish to the year, with record high sales and double-digit growth across core segments.
Key Takeaways
Lamb Weston reported a 14% increase in net sales to $1,153 million and a 38% increase in income from operations to $136 million compared to the fourth quarter of fiscal 2021. Net income decreased by 51% to $32 million, but adjusted net income increased by 45% to $95 million. Diluted EPS decreased by 50% to $0.22, while adjusted diluted EPS increased by 48% to $0.65.
Net sales increased 14% to $1,153 million.
Income from operations increased 38% to $136 million.
Net income decreased 51% to $32 million; Adjusted Net Income increased 45% to $95 million.
Diluted EPS decreased 50% to $0.22 from $0.44; Adjusted Diluted EPS increased 48% to $0.65.
Forward Guidance
The Company expects net sales of $4.7 billion to $4.8 billion, net income of $360 million to $410 million, Diluted EPS of $2.45 to $2.85.
Positive Outlook
- Net sales of $4.7 billion to $4.8 billion, with growth versus the prior year driven by the benefit of pricing actions to offset significant input and transportation cost inflation, as well as favorable mix and higher volume.
- Net income of $360 million to $410 million, Diluted EPS of $2.45 to $2.85, and Adjusted EBITDA including unconsolidated joint ventures in the range of $840 million to $910 million, with growth versus the prior year driven by higher sales and gross margin expansion.
- SG&A of $475 million to $500 million, reflecting increased investments to upgrade its information systems and enterprise resource planning (ERP) infrastructure, as well as higher compensation and benefits costs.
- Gross margins will improve and approach its normalized annual rate of 25 percent to 26 percent during the second half of fiscal 2023.
- The anticipated improvement is predicated on a potato crop harvested in fall 2022 that is in line with historical averages, the continued successful implementation of the Company’s pricing actions to offset input and transportation costs inflation, and a broad easing of labor and logistics pressures.
Challenges Ahead
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