Lamb Weston Reports Big Q2 FY2024 Beat Following Big Run Higher in Shares
Lamb Weston (LW) has posted its Q2 FY2024 financial results, and the results are impressive. The company reported a revenue of $1.73 billion, a 35.7% year-on-year increase, which was above analysts estimates of $1.70 billion. Non-GAAP earnings per share were $1.45, a 2.4% increase compared to the same quarter last year and beating analysts estimates of $1.42. The company reaffirmed its revenue guidance for the full year of $6.9 billion at the midpoint but raised its EPS guidance for the full year.
The companys gross margin decreased to 27.5% compared to 29.9% in the same quarter last year, and free cash flow was -$19.7 million, down from $67.3 million in the previous quarter. However, organic revenue increased by 36% year-on-year, including the consolidation of a joint venture, and sales volumes increased by 24% year-on-year, including the consolidation of the joint venture.
The companys president and CEO, Tom Werner, expressed satisfaction with the quarters results, stating that they executed well across their customer channels in North America and key international markets. The Grown in Idaho brand, Lamb Westons best-known product, produces and distributes potato products such as frozen fries and mashed potatoes.
Lamb Westons annualized revenue growth rate of 21.3% over the last three years was exceptional, and this quarters revenue growth of 35.7% exceeded analysts estimates by 1.9%. The companys strong performance in sales growth and volume growth demonstrates its ability to sell more products while raising prices and enjoying inelastic demand. The companys total addressable market is so vast that it has room to grow many times in size.
Packaged food stocks are considered resilient investments as they offer convenience and cater to health-conscious and sustainable food options. Lamb Westons sales growth and volume growth, along with its ability to raise prices, make it an attractive investment in the packaged food industry. With its 11.4% expected sales growth rate over the next 12 months, the company is poised for continued success in the future.
$LW(LW)