Lamb Weston's weak guidance meets a surprise earnings beat
Weak FY27 guidance and falling profit Lamb Weston's quarterly profit fell and its fiscal 2027 guidance of $2.95-$3.25 per share with only 0-1% sales growth disappointed investors, sending shares down 3.48% before the market opened. The weak outlook reflects slipping french fry sales and pressure on earnings.
This is the core negative event that set the tone for the period and pushed LW shares down.
North America volume growth drives a 13% share gain LW shares rose 13.1% in a month as North America sales volume jumped 11% on new customer contracts, market-share gains and strong retention. Segment profit rose 17%. But price/mix fell 3% and international profit plunged 81%, showing the recovery is uneven.
This explains the main positive force behind LW's price rebound during the period.
Costs and price/mix still weigh on results Before the Q1 report, analysts expected revenue and earnings to decline, with adjusted EBITDA down in the low-teens range. Higher potato and edible-oil costs and price/mix headwinds in North America and tough competition in Europe were the main drags, partly offset by volume growth.
This shows the real cost pressures that kept a lid on LW's recovery despite volume gains.
Q1 earnings beat and raised full-year outlook Lamb Weston reported Q1 adjusted EPS of $0.75, well above the $0.59 consensus, on 1% sales growth. It raised its fiscal 2027 sales growth forecast to low single digits and lifted its EPS outlook to $3.05-$3.35, a clear sign that business conditions are improving faster than expected.
This is the latest and most important positive development, directly lifting LW's earnings outlook.