Lamb Weston Holdings Inc. (Lamb Weston (LW)) just served up a quarter that left Wall Street hungry for more. The frozen potato products maker reported fiscal fourth-quarter 2026 results that blew past analyst estimates, and its outlook for fiscal 2027 also came in above expectations.
The company posted adjusted earnings of 92 cents per share, crushing the consensus estimate of 63 cents. Revenue rose to $1.77 billion, topping the $1.69 billion analysts were looking for. Not bad for a company that makes french fries, hash browns, and other frozen potato products for restaurants, retailers, and food-service customers around the world.
Lamb Weston is headquartered in Eagle, Idaho, and operates manufacturing and distribution facilities in multiple countries. It's a classic American food processing company that has found a way to make a lot of money off a humble spud.
North America Drives Growth
Net sales increased 6% year over year, supported by a 7% increase in sales volume, a 2% favorable currency impact, and an extra week in the quarter. But the real star was North America, where sales climbed 9% as volume surged 11%. That marks the sixth straight quarter of volume growth for the region.
The company attributed the gains to new customer wins, market share gains, strong customer retention, and that extra week. Price and mix declined 2% because of customer pricing support and a shift toward faster-growing chain and private-label products. In other words, they're selling more fries, but at slightly lower average prices.
International sales fell 2%, with volume down 2% and price/mix dropping 4%. Growth in Asia Pacific and Latin America was more than offset by weaker performance in Europe, the Middle East and Africa, where challenging market conditions and disruptions related to the Middle East weighed on results.
For the full fiscal 2026, Lamb Weston generated $942.9 million in operating cash flow and spent $410.1 million on capital expenditures. The company ended the year with $68.2 million in cash and $1.28 billion of available credit capacity.
Cost Savings, Capital Returns, and Outlook
Lamb Weston said it exceeded its fiscal 2026 cost savings target of $100 million under its Focus to Win strategy. The company remains on track to deliver at least $250 million in annualized savings by fiscal 2028 through supply chain improvements and lower selling, general and administrative expenses.
The company returned $320.7 million to shareholders during fiscal 2026 through dividends and share repurchases, including $113.2 million of buybacks. About $245 million remains under its current share repurchase authorization. Lamb Weston also declared a quarterly dividend of 38 cents per share, payable Sept. 4, 2026, to shareholders of record on Aug. 7, 2026.
For fiscal 2027, the company expects adjusted earnings of $2.95 to $3.25 per share, compared with the analyst consensus estimate of $3.01. It projects revenue of $6.61 billion to $6.68 billion, above the consensus estimate of $6.39 billion.
CEO Mike Smith said the company exceeded its financial outlook, driven by strong sales and profitability, particularly from higher North America volumes. He added that disruptions in the Middle East and inflation weighed on the EMEA business, while supply chain and manufacturing improvements helped offset inflationary and operating cost pressures.
LW Price Action: Lamb Weston shares were up 0.75% at $49.55 at the time of publication on Friday.
