Shares of Lamb Weston Holdings, Inc. (NYSE: LW) stayed inexperienced on Friday. The inventory has dropped 19% over the previous three months. The French fry large is slated to report its third quarter 2025 earnings outcomes on Thursday, April 3, earlier than the market opens. Right here’s a have a look at what to anticipate from the earnings report:
Income
Analysts are projecting income of $1.5 billion for Lamb Weston in Q3 2025, which signifies a progress of over 2% from the identical interval a yr in the past. In Q2 2025, internet gross sales declined 8% year-over-year to $1.6 billion.
Earnings
The consensus goal for Q3 2025 earnings per share is $0.87, which means a decline of 27% from the year-ago interval. In Q2 2025, adjusted EPS decreased 54% YoY to $0.66.
Factors to notice
Lamb Weston has been dealing with a difficult working atmosphere marked by softness in demand for frozen potato merchandise and capability expansions by rivals. The corporate expects these headwinds to persist by fiscal yr 2025 and into fiscal yr 2026, which led it to decrease its steerage for full-year 2025. These elements might have impacted the Q3 efficiency.
The potato merchandise maker’s efficiency within the second quarter of 2025 got here under its expectations because of increased manufacturing prices and softer volumes. Volumes in Q2 fell 6%, impacted by a drop in restaurant site visitors within the US and plenty of key worldwide markets, in addition to buyer share losses because of heavy competitors. Volumes have been additionally impacted by the exiting of sure low-price, low-margin enterprise within the Europe, Center East, and Africa area however this headwind isn’t anticipated to proceed within the third quarter.
Though restaurant site visitors within the US is being buoyed by increased promotional exercise by fast service eating places (QSRs), there was a downsizing in serving sizes of French fries, which pose headwinds to volumes.
LW anticipates quantity pressures in North America throughout the second half of the yr from the lack of a sequence restaurant buyer, and a larger-than-expected affect from the reductions in serving sizes. Worldwide volumes are anticipated to be impacted by buyer share losses because of heavy competitors, and comfortable restaurant site visitors. These pressures are anticipated to be offset by some new buyer wins and the regaining of share of some misplaced clients. The corporate has forecast gross sales of $3.1-3.2 billion for the second half of the yr, representing progress of 1-4% YoY. These advantages might have aided the third quarter outcomes.
Lamb Weston may additionally see advantages from price financial savings generated by its restructuring plan. As a part of its restructuring efforts, the corporate reduce manufacturing throughout sure traces, lowered headcount and lowered sure different bills.
