Frozen fries maker Lamb Weston raises annual forecasts on strong demand (updated)

Mcdonald's

06/10/2026 15:48

Updates shares in paragraph 1, adds analyst comment in bullet 3, details in bullets 4 and 7 and executive comment in bullets 5 and 6
Oct 6 (Reuters) - Lamb Weston LW.N on Tuesday raised annual sales and profit forecasts, banking on resilient demand for its frozen potato products at quick-service restaurants, its primary customers, sending its shares up 11% in morning trading.
Demand for lower-priced restaurant offerings such as fries has been on the rise with growing inflationary pressure on household budgets.
     
Here are more details:
Lamb Weston projected fiscal 2027 revenue growth in the low single digits, compared with the previous forecast of flat to 1% growth. Analysts were expecting a 1.5% decline, according to data compiled by LSEG.
The company raised its annual adjusted earnings forecast to $3.05 to $3.35 per share, above the prior view of $2.95 to $3.25.
Analysts at BNP Paribas said the forecast raise was an "encouraging update," particularly so early in the year and against an inflationary backdrop.
First-quarter net sales in North America, which contributes the majority of its revenue, rose 5% to $1.14 billion from a year ago.
Lamb Weston executives said on a call with analysts that the company's greater exposure to chicken-focused fast-food chains, which saw stronger traffic, benefited sales mix.
They also anticipate that tighter supply of potatoes due to poor yield in Europe will result in higher raw material costs this year, which the company is mitigating through pricing actions.
Quarterly sales at its international segment declined 8%, hurt by weakness in Europe due to extensive heat and dry conditions.
Lamb Weston said it is facing unexpected inflationary pressure in input costs and transportation and aims to counter it by working with suppliers and hedging.
The company beat analysts' estimates for quarterly net sales and profit.

 (Reporting by Shania S Thomas in Bengaluru; Editing by Shreya Biswas)
 ((shanias.thomas@thomsonreuters.com))