Lamb Weston Holdings (LW) Shares Drop 1.70% to 2025 Low on ERP Failures, $330M Sales Guidance Cut and Legal Scrutiny

Lamb Weston Holdings (LW) shares plummeted to a 2025 low on October 10, with an intraday decline of 1.70%, signaling renewed investor concerns over the company’s operational and financial stability. The stock’s selloff reflects a broader erosion of confidence linked to persistent challenges in its recent ERP system rollout.

The company’s struggles trace to a failed implementation of a new Enterprise Resource Planning system, which triggered severe operational disruptions. These included shipment delays, canceled orders, and a $135 million reduction in Q3 2024 net sales. The fallout extended to a $72 million decline in net income and a $95 million drop in adjusted EBITDA, forcing LW to slash full-year sales guidance by $330 million at the midpoint. Key clients, including McDonald’s, faced supply chain interruptions, compounding reputational damage and straining relationships with critical partners.

Legal scrutiny has further destabilized the stock. A class-action lawsuit filed in June 2024 alleges the board neglected fiduciary duties by inadequately overseeing the ERP project, resulting in significant financial losses. The litigation highlights governance risks, with investors now questioning the company’s ability to manage large-scale technological transitions. The stock’s 19% plunge following the ERP disclosure underscores the market’s punitive response to these missteps.

Competitive pressures and customer trust erosion amplify the crisis. Rivals like J.R. Simplot and McCain Foods may capitalize on LW’s operational gaps, threatening long-term market share. Meanwhile, revised guidance and unresolved ERP issues have fueled investor skepticism, with the stock underperforming broader indices like the S&P 500 and Dow Jones. Strategic reassessments, including potential partnerships or phased ERP solutions, will be critical to restoring operational resilience and investor trust.