Activist investor Starboard pushes Lamb Weston to boost operations, double cost cuts (updated)

Lamb Weston Holdings

09/03/2026 11:18

Adds shares, Lamb Weston's statement in paragraph 9

March 9 (Reuters) - Starboard Value on Monday urged Lamb Weston LW.N to double its cost-cutting targets and review its international operations, as the activist investor revealed a stake in the frozen potato supplier.

The company, which supplies potato sides and appetizers to fast-food chains such as McDonald's MCD.N and Yum Brands YUM.N, had settled with activist stakeholder Jana Partners for board representation last year, avoiding a bruising proxy fight.

Lamb Weston should aim for about $500 million in total cost reductions, Starboard said, up from the company's current plan to cut at least $250 million by the end of 2028.

The activist also called for a review of the company's Asia Pacific operations, citing rising competition and concerns that the business may be diverting focus from a broader turnaround.

The size of Starboard's stake was not immediately clear.

Starboard has been an investor "for a while" and recently increased its position, the Wall Street Journal reported on Sunday.

In its letter, the activist investor also urged the Lamb Weston board to set targets for adjusted selling, general and administrative expenses at 4.5% of revenue and a 25% core profit margin as a medium-term goal.

"A margin target, rather than a cost-reduction target, provides greater transparency and accountability by allowing investors to easily track the company's progress over time," Jeffrey Smith, managing member at Starboard, said.

Lamb Weston "values ongoing and constructive dialogue with its shareholders and appreciates productive feedback to drive long-term shareholder value", the company said in an emailed statement.

The company in December kept its annual forecasts intact for a second time despite an upbeat quarter, against the backdrop of demand and commodity cost pressures.

Last month, Lamb Weston named James Gray as chief financial officer and beverage-industry veteran Jan Craps to a newly created executive chair role.

It had appointed insider Michael Smith as CEO last year following pressure from Jana Partners.

Shares of the company were down 1.5% in early trading amid broader market weakness. They had declined around 37% in 2025.

 (Reporting by Neil J Kanatt and Koyena Das in Bengaluru; Editing by Krishna Chandra Eluri and Sriraj Kalluvila)

 ((Neil.JKanatt@thomsonreuters.com))