Lamb Weston Holdings 2026 Q1 Earnings Net Income Falls 50%

Lamb Weston Holdings reported mixed Q1 2026 results, with revenue up slightly but net income and EPS declining sharply. The company reaffirmed full-year guidance, maintaining confidence in its long-term strategic direction despite short-term earnings pressures.

Revenue
Lamb Weston Holdings reported total revenue of $1.66 billion in 2026 Q1, a 0.3% increase compared to $1.65 billion in 2025 Q1. At constant currency, revenue declined 1%, primarily due to a 7% drop in price/mix that outweighed a 6% volume increase. The North America segment saw a 2% revenue decline, or $19.1 million, to $1,084.6 million, attributed to a 7% price/mix decline. In contrast, the International segment grew 4%, or $24.3 million, to $574.7 million, driven by 6% volume growth in Asia and multinational chains, despite a 6% price/mix decline at constant currency.

Earnings/Net Income
Lamb Weston Holdings’s EPS fell 48.3% to $0.46 in 2026 Q1, down from $0.89 in 2025 Q1. Net income also declined significantly to $64.30 million, a 49.5% decrease from $127.40 million in the prior year period. Despite this, the company has maintained profitability for 10 consecutive years during this quarter, underscoring its business resilience. The earnings shortfall primarily resulted from a higher effective tax rate and reduced Equity Method Investment Earnings.

Price Action
The stock price of Lamb Weston Holdings fell 2.24% during the latest trading day, but it gained 6.92% over the most recent full trading week and 3.25% month-to-date.

Post-Earnings Price Action Review
Following the release of Q1 earnings, Lamb Weston Holdings's stock experienced mixed short-term price movement. While the stock declined by 2.24% on the day of the earnings report, it saw a significant rebound of 6.92% over the following week and added 3.25% in the month-to-date period. These fluctuations reflect market reactions to the company's earnings performance and future outlook.

CEO Commentary
Mike Smith, President, CEO & Director, highlighted a strong Q1 performance driven by volume growth and commercial momentum, exceeding expectations. He emphasized progress on the “Focus to Win” strategy, including cost savings and customer-centric initiatives. Strategic priorities include innovation, operational excellence, and expanding market share through new products and partnerships. Smith noted the restart of a curtailed production line to meet demand and positioned Lamb Weston as a leader in a growing global fry market. Leadership remains optimistic, with a focus on profitable growth, long-term value creation, and leveraging competitive advantages in key markets.

Guidance
Lamb Weston Holdings reaffirmed fiscal 2026 revenue guidance of $6.35–$6.55 billion at constant currency, with volume growth expected in both segments. Adjusted EBITDA guidance remains at $1B–$1.2B, incorporating tariffs and margin impacts from factors like startup costs and pricing pressures. Capital expenditures are forecast at $500M, with $400M allocated to maintenance/modernization and $100M to environmental projects. The tax rate guidance was updated to 26–27%, with first-half rates in the low 30s. The company expects flat Q1–Q2 gross profit margins, with seasonal improvements in Q3 and Q4.

Additional News
Lamb Weston Holdings announced a quarterly dividend of $0.37 per share, payable on November 28, 2025, to shareholders of record as of October 31, 2025. The company also returned $51.7 million to shareholders through cash dividends in Q1 2026 and repurchased $10.4 million of its common stock, with 187,259 shares repurchased at an average price of $55.34 per share. The board has approximately $348 million remaining under its share repurchase program. The company also reported $79.2 million in capital expenditures, net of proceeds from blue chip swap transactions, during the first quarter of fiscal 2026. As of August 24, 2025, Lamb Weston Holdings had $98.6 million in cash and cash equivalents and $1,318.4 million of available liquidity under its revolving credit facility. The company’s focus remains on implementing the "Focus to Win" strategy, with cost savings initiatives expected to deliver $100 million in savings and $60 million in working capital improvements by the end of fiscal 2026.