NYSE$LW
Lamb Weston Holdings Inc · Q1 2023 earnings
Q1 2023 earnings · · Investor relations
Briefing
Lamb Weston's first quarter 2023 results were reported, demonstrating strong sales and earnings growth driven by pricing actions and manufacturing cost-savings.
Lamb Weston reported a strong first quarter in fiscal year 2023, with net sales increasing by 14% to $1,126 million and net income increasing by 678% to $232 million. The company's performance was driven by effective pricing strategies across all business segments and cost-saving measures that offset inflation. Lamb Weston reaffirms its fiscal year 2023 outlook.
- Net sales increased 14% to $1,126 million.
- Income from operations increased 161% to $157 million.
- Net income increased 678% to $232 million and Diluted EPS increased 700% to $1.60.
- Adjusted EBITDA including unconsolidated joint ventures increased 92% to $228 million.
Headline financials
Revenue & EPS history
Lamb Weston · Revenue · Quarterly
$1.13B
Revenue by segment
Lamb Weston · $1.67B total across 2 segments · Q1 2024
- North America$1.14B—68.2%
- International$530M—31.8%
Forward guidance
Lamb Weston reaffirms its financial targets for fiscal year 2023, expecting net sales between $4.7 billion and $4.8 billion and adjusted EBITDA including unconsolidated joint ventures between $840 million and $910 million.
Tailwinds
- Net sales of $4.7 billion to $4.8 billion, with growth versus the prior year primarily driven by the benefit of pricing actions to offset significant input and transportation cost inflation, as well as favorable mix.
- Including items impacting comparability of $161.4 million (approximately $123.7 million after-tax, or $0.85 per share), net income of $485 million to $535 million and Diluted EPS of $3.30 to $3.70.
- Excluding items impacting comparability, Adjusted Net Income of $360 million to $410 million, Adjusted Diluted EPS of $2.45 to $2.85, and Adjusted EBITDA including unconsolidated joint ventures of $840 million to $910 million, with growth versus the prior year driven by higher sales and gross margin expansion.
- The Company continues to expect SG&A of $475 million to $500 million, reflecting increased higher compensation and benefits costs, increased investments to upgrade its information systems and enterprise resource planning (“ERP”) infrastructure, and higher advertising and promotion expenses.
- During the second half of fiscal 2023, the Company continues to expect gross margins will improve and approach a normalized annual rate of 25 percent to 26 percent.
Headwinds
- During the first half of fiscal 2023, the Company continues to expect its gross margins will be pressured as compared to normalized seasonal rates as it continues to manage through significant inflation for key production inputs, transportation and packaging, as well as higher raw potato costs on a per pound basis due to the impact of extreme summer heat that negatively affected the yield and quality of potato crops in the Pacific Northwest in fall 2021.
- The Company continues to expect its gross margins will also be pressured by ongoing industrywide operational challenges, including labor and commodities shortages, resulting from volatility in the broader supply chain.
- Interest expense, net of approximately $115 million
- Depreciation and amortization expense of approximately $210 million
- Effective tax rate (full year) of approximately 24 percent
Historical earnings impact
How earnings announcements have historically affected this stock's price.
Avg. return before/after earnings
Based on 19 quarterly earnings reports · overlaid with Q1 2023
-1.3%
Avg return
Earnings day
-1.2%
Avg return
5 days after
+0.1%
Avg return
30 days after
52%
23 / 44 earnings
Positive
+13.9%
Q2 2023
Best reaction
-32.6%
Q4 2024
Worst reaction
| Quarter | Report date | Reaction (Day 0) | +5 days | +30 days |
|---|---|---|---|---|
| Q3 2026 | -0.6% | -2.8% | — | |
| Q2 2026 | -25.0% | -28.4% | -27.0% | |
| Q1 2026 | +4.5% | +13.0% | +11.7% | |
| Q4 2025 | -2.1% | -2.4% | -1.5% | |
| Q3 2025 | +10.0% | -3.1% | -4.9% | |
| Q2 2025 | -20.6% | -18.6% | -23.2% | |
| Q1 2025 | +2.8% | +6.3% | +20.0% | |
| Q4 2024 | -32.6% | -28.5% | -20.3% | |
| Q3 2024 | -21.1% | -20.5% | -15.9% | |
| Q2 2024 | +1.0% | +2.4% | +1.1% | |
| Q1 2024 | +3.3% | +6.5% | +4.0% | |
| Q4 2023 | -9.7% | -9.4% | -15.1% | |
| Q3 2023 | +3.0% | +3.7% | +7.6% | |
| Q2 2023 | +13.9% | +12.1% | +12.2% | |
| Q1 2023 | +4.9% | +5.2% | +8.4% | |
| Q4 2022 | +6.7% | +7.3% | +7.4% | |
| Q3 2022 | +9.7% | +9.6% | +4.5% | |
| Q2 2022 | +11.3% | +9.8% | -0.6% | |
| Q1 2022 | -9.5% | -11.6% | -7.5% | |
| Q4 2021 | -12.2% | -12.2% | -15.2% | |
| Q3 2021 | -4.1% | -2.8% | -2.4% | |
| Q2 2021 | +0.3% | -2.0% | +3.7% | |
| Q1 2021 | +5.9% | +3.5% | -5.4% | |
| Q4 2020 | -15.2% | -14.8% | -11.4% | |
| Q3 2020 | -12.6% | -9.2% | +2.2% | |
| Q2 2020 | +7.9% | +8.5% | +8.6% | |
| Q1 2020 | +5.9% | +3.2% | +5.4% | |
| Q4 2019 | -6.0% | -4.3% | +2.9% | |
| Q3 2019 | -1.2% | -3.2% | -10.3% | |
| Q2 2019 | -3.3% | -4.5% | -0.8% | |
| Q1 2019 | +9.6% | +13.3% | +17.1% | |
| Q4 2018 | +2.5% | +2.8% | -1.9% | |
| Q3 2018 | +4.0% | +7.3% | +9.5% | |
| Q2 2018 | +2.9% | +3.5% | +1.3% | |
| Q1 2017 | +3.0% | +3.5% | +10.5% | |
| Q1 2018 | +3.0% | +3.5% | +10.5% | |
| Q4 2015 | -1.1% | -2.1% | +0.6% | |
| Q1 2016 | -1.1% | -2.1% | +0.6% | |
| Q4 2017 | -1.1% | -2.1% | +0.6% | |
| Q3 2016 | +3.0% | +2.7% | -0.4% | |
| Q3 2017 | +3.0% | +2.7% | -0.4% | |
| Q4 2016 | +0.0% | +0.9% | +5.9% | |
| Q2 2017 | +0.0% | +0.9% | +5.9% | |
| Q2 2016 | +0.0% | +0.9% | +5.9% |
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