Lamb Weston Q4 Results Top Estimates with 4% Revenue Growth, New Cost Savings Initiative

Lamb Weston reported Q4 FY2025 adjusted EPS of $0.87, exceeding estimates by 11.5%, and revenue of $1.68 billion, up 4% YoY. The company introduced a "Focus to Win" initiative targeting at least $250 million in cost savings by FY2028. Despite positive headline numbers, pressures on profitability remain due to competitive pricing, higher fixed costs, and muted growth in restaurant demand.

Lamb Weston Holdings, Inc. (NYSE: LW) reported its fourth quarter and fiscal year 2025 results, showcasing a 4% year-over-year (YoY) increase in net sales to $1.68 billion. Adjusted earnings per share (EPS) reached $0.87, exceeding analyst estimates by 11.5%. The company's "Focus to Win" initiative aims to deliver at least $250 million in cost savings by fiscal year 2028, improving execution and driving long-term profitable growth.

Q4 FY2025 Highlights

- Net sales increased by $63.9 million to $1.68 billion, up 4% YoY.
- Volume rose 8% due to contract wins across channels and geographic regions, partially offset by soft global restaurant traffic trends.
- Price/mix declined by 4%, reflecting efforts to partner with customers on pricing and trade.
- Gross profit decreased by $45.6 million to $342.3 million.
- Adjusted gross profit declined by $19.5 million to $343.5 million.
- Selling, general, and administrative expenses (SG&A) decreased by $34.7 million to $140.7 million.
- Net income declined by $9.7 million to $119.9 million.
- Diluted EPS decreased by $0.04 to $0.85.
- Adjusted net income increased by $9.1 million to $122.8 million.
- Adjusted EPS increased by $0.09 to $0.87.
- Adjusted EBITDA increased by $1.5 million to $284.9 million.

North America Segment

- Net sales declined by $10.1 million to $1.10 billion, down 1% YoY.
- Volume increased by 4%.
- Price/mix declined by 5%.
- Adjusted EBITDA decreased by $18.6 million to $257.9 million.

International Segment

- Net sales increased by $74.0 million to $572.7 million, up 15% YoY.
- Volume increased by 16%.
- Price/mix declined by 1%.
- Adjusted EBITDA increased by $22.2 million to $62.6 million.

Fiscal Year 2025 Overview

- Net sales declined by $16.3 million to $6.45 billion.
- Price/mix decreased by 2%, offset by a 2% increase in volume, primarily in the International segment.

Focus to Win Initiative

Lamb Weston introduced the "Focus to Win" initiative, aiming to deliver at least $250 million in cost savings by FY2028. The plan includes $200 million in annualized run rate savings and $120 million of favorable working capital improvements by year-end FY2027. The initiative prioritizes markets and channels where Lamb Weston is well-positioned for long-term success and aims to leverage the company's strengths in category-leading innovation, exceptional products, and customer-centric service.

Outlook

Lamb Weston expects net sales of $6.35 billion to $6.55 billion, adjusted EBITDA of $1,000 million to $1,200 million, and capital expenditures of $500 million, including a $100 million wastewater treatment investment, in FY2026.

References

[1] https://investors.lambweston.com/news-releases/2025/07-23-2025-130151206