Lamb Weston Holdings 2026 Q2 Earnings 272% Net Income Surge and 1.1% Revenue Growth

Lamb Weston Holdings (LW) reported fiscal 2026 Q2 earnings on Dec 19, 2025, exceeding expectations with a net income turnaround and modest revenue growth. The company reaffirmed its full-year guidance, maintaining adjusted EBITDA targets between $1.0 billion and $1.2 billion.

Revenue

Lamb Weston’s total revenue rose 1.1% to $1.62 billion in 2026 Q2, up from $1.60 billion in the prior year. The North America segment, contributing $1.07 billion in sales, saw 8% volume growth driven by customer wins and retention, though price/mix declined 8%. The International segment generated $548.6 million, with 7% volume growth in Asia and multinational chains offset by 8% price/mix declines.

Earnings/Net Income

The company returned to profitability with EPS of $0.45, reversing from a $0.25 loss in 2025 Q2. Net income surged 272% to $62.1 million, up from a $36.1 million loss. This marked a significant turnaround, supported by cost savings and improved operating efficiencies.

Post-Earnings Price Action Review

Lamb Weston’s stock faced sharp declines post-earnings, tumbling 26.35% weekly and 21.79% month-to-date. Historically, buying shares after revenue beats and holding for 30 days has shown favorable performance, with a 63% success rate over two years. Short-term gains followed Q4 2025 results despite conservative guidance, while long-term growth hinges on cost savings and customer wins. Risks include margin compression and macroeconomic headwinds. Dividend payouts and buybacks could bolster returns.

CEO Commentary

CEO Mike Smith emphasized 8% Q2 volume growth, driven by customer partnerships and global supply chain optimization. North America’s capacity reopening offset international competitive pressures. Strategic priorities include disciplined capital allocation and margin improvement.

Guidance

CFO Bernadette Madarieta reiterated fiscal 2026 adjusted EBITDA guidance of $1.0 billion to $1.2 billion, with North America volume growth expected to continue. Free cash flow remains strong, supporting $308 million in remaining share repurchase authorization and a 3% dividend increase.

Additional News

1. Dividend & Buyback News: Lamb Weston raised its quarterly dividend by 3% to $0.38 per share, effective Feb 27, 2026, and allocated $308 million for share repurchases.

2. Capital Allocation: The company plans capital expenditures below $500 million in 2026, maintaining a 3.1x leverage ratio.

3. Debt Management: With a debt-to-equity ratio of 2.23, the company emphasized disciplined debt management and liquidity, supported by $1.35 billion in available credit.

Revenue

Earnings/Net Income

Guidance