Lamb Weston Reports Unexpected Loss, Cuts Outlook, Replaces CEO | Global News Avenue

Lamb Weston shares (long wave) tumbled nearly 20% in premarket trading Thursday after the frozen French fries maker unexpectedly posted a loss, lowered its fiscal 2025 guidance and named new executives Chief Executive Officer (CEO).

The Idaho-based company posted a second-quarter loss of $36.1 million, or $0.25 a share, while analysts polled by Visible Alpha expected a profit of $88 million, or $0.61 a share. Revenue of $1.6 billion also fell short of expectations.

Lamb Weston announced in a separate press release that it is currently Chief Operating Officer (COO) Michael J. Smith will take over as CEO from Tom Werner, effective January 3. The board of directors will also be replaced by Smith, and Werner “will serve in an advisory role until August 31, 2025 to ensure a smooth transition,” the company said.

Lamb Weston slashes fiscal 2025 outlook

The company lowered its fiscal 2025 target and now expects sales of $6.35 billion to $6.45 billion. Earnings per share (EPS) US$2.30 to US$2.45, and adjusted earnings per share of US$3.05 to US$3.20. Last quarter, it guided for sales of $6.6 billion to $6.8 billion, earnings per share of $2.70 to $3.15, and adjusted earnings per share of $4.15 to $4.35, both of which were higher than its previous targets. downgraded.

“In terms of the broader operating environment, we expect continued challenges during the remainder of fiscal 2025 and into fiscal 2026, primarily due to an accelerated pace of capacity additions and the recent continued softening of global frozen potato demand below historical levels, particularly outside of North America until demand trends improve and capacity expansion normalizes,” Werner said.

Lamb Weston shares were down nearly 28% for the year as of Wednesday and fell a further 18% in premarket trading.

UPDATE – This article has been updated with the appointment of a new CEO and the latest share price.