Lamb Weston Reports Second Quarter Fiscal 2025 Results; Board Approves $250 Million Share Repurchase Authorization Increase and Increases Quarterly Dividend; Updates Fiscal Year 2025 Outlook
Second Quarter Fiscal 2025 Highlights
-
GAAP Results include a
pre-tax charge related to the Restructuring Plan announced on October 1, 2024$159 million -
GAAP Results as Compared to Second Quarter Fiscal 2024:
-
Net sales declined
8% to$1,601 million -
Income from operations declined
94% to$19 million -
Net income declined
to a loss of$251 million $36 million -
Diluted EPS declined
to a loss of$1.73 $0.25
-
Net sales declined
-
Non-GAAP Results as Compared to Second Quarter Fiscal 2024:
-
Adjusted Income from Operations(1) declined
41% to$178 million -
Adjusted Net Income(1) declined
55% to$95 million -
Adjusted Diluted EPS(1) declined
54% to$0.66 -
Adjusted EBITDA(1) declined
25% to$282 million
-
Adjusted Income from Operations(1) declined
-
Paid
in cash dividends to common shareholders$51.6 million
Updated Fiscal 2025 Outlook
-
Net sales of
to$6.35 billion $6.45 billion -
GAAP net income target of
to$330 million , and Diluted EPS target of$350 million to$2.30 $2.45 -
Adjusted EBITDA(1) of
to$1,170 million $1,210 million -
Adjusted Net Income(1) target of
to$440 million and Adjusted Diluted EPS(1) target of$460 million to$3.05 $3.20
“Our financial results in the second quarter were below our expectations,” said Tom Werner, President and CEO. “Higher-than-expected manufacturing costs and softer volumes accounted for the shortfall, while price/mix and operating expenses were broadly in line with our targets for the quarter.”
“In terms of the broader operating environment, we expect challenging conditions to persist through the remainder of fiscal 2025 and into fiscal 2026, driven primarily by an accelerating rate of capacity additions and continued near-term softening of global frozen potato demand below historical rates, particularly outside
“The Company continues to take prudent steps to successfully adapt to this dynamic environment. In addition to the cost benefits we expect to realize from our Restructuring Plan, including our previously announced actions to permanently close or temporarily curtail production lines to better manage our factory utilization rates, we are actively evaluating additional cost-savings opportunities as we work to better align our operations with the current environment. This includes efforts to reduce manufacturing and supply chain costs and operating expenses to protect and improve profitability. We are executing with urgency and discipline to make lasting improvements to our operations as we weather what we believe are transitory challenges, and we remain focused on leveraging our solid fundamentals and balance sheet to deliver value to shareholders.”
Summary of Second Quarter FY 2025 Results ($ in millions, except per share) |
|||||||||||
|
Q2 2025 |
|
Year-Over-Year
Growth Rates |
|
YTD
FY 2025 |
Year-Over-Year
Growth Rates |
|||||
Net sales |
$ |
1,600.9 |
|
|
(8 |
)% |
|
$ |
3,255.0 |
(4 |
)% |
Income from operations |
$ |
18.5 |
|
|
(94 |
)% |
|
$ |
230.6 |
(63 |
)% |
Net income (loss) |
$ |
(36.1 |
) |
|
(117 |
)% |
|
$ |
91.3 |
(80 |
)% |
Diluted EPS |
$ |
(0.25 |
) |
|
(117 |
)% |
|
$ |
0.64 |
(79 |
)% |
|
|
|
|
|
|
|
|||||
Adjusted Income from Operations(1) |
$ |
178.3 |
|
|
(41 |
)% |
|
$ |
365.5 |
(42 |
)% |
Adjusted Net Income(1) |
$ |
94.5 |
|
|
(55 |
)% |
|
$ |
199.2 |
(56 |
)% |
Adjusted Diluted EPS(1) |
$ |
0.66 |
|
|
(54 |
)% |
|
$ |
1.40 |
(55 |
)% |
Adjusted EBITDA(1) |
$ |
281.9 |
|
|
(25 |
)% |
|
$ |
571.8 |
(28 |
)% |
Q2 2025 Commentary
Restructuring Plan
On October 1, 2024, the Company announced a restructuring plan (the “Restructuring Plan”), which is designed to drive operational and cost efficiencies and improve cash flows. The Restructuring Plan includes the permanent closure of a manufacturing facility, the temporary curtailment of certain production lines and schedules across the Company's manufacturing network in
In connection with the Restructuring Plan, the Company expects to recognize total pre-tax charges of
Net income (loss) for the thirteen and twenty-six weeks ended November 24, 2024 included:
-
($159.1 million after-tax, or$123.6 per share) of pre-tax charges, of which$0.86 were cash expenses and$114.5 million of non-cash expenses;$44.6 million -
($75.5 million after-tax, or$57.4 million per share) was included in Cost of sales;$0.40 -
($74.6 million after-tax, or$59.3 million per share) was included in Restructuring expense; and$0.41 -
($9.0 million after-tax, or$6.9 million per share) was included in Equity method investment earnings.$0.05
-
Q2 Results of Operations
Net sales declined
Gross profit declined
Adjusted Gross Profit(1) declined
Selling, general and administrative expenses (“SG&A”) increased
Adjusted SG&A(1) declined
Income from operations declined
Net income declined
Adjusted Net Income(1) declined
Adjusted EBITDA(1) declined
The Company’s effective tax rate(3) in the second quarter of 2025 was (59.0) percent, versus 23.5 percent in the second quarter of fiscal 2024. During the second quarter of 2025, the Company recorded a
Q2 2025 Segment Highlights
North America Summary
Net sales for the
Price/mix declined 3 percent, due to planned investments in price and trade support across all sales channels to attract and retain volume, as well as unfavorable channel and product mix.
North America Segment Adjusted EBITDA declined
International Summary
Net sales for the International segment, which includes all sales to customers outside of
International Segment Adjusted EBITDA declined
Equity Method Investment Earnings
Equity method investment earnings from unconsolidated joint ventures were
Cash Flows, Capital Expenditures and Liquidity
Net cash provided by operating activities for the first half of fiscal 2025 was
Capital expenditures, net of proceeds from blue chip swap transactions, during the first half of fiscal 2025 were
As of November 24, 2024, the Company had
Capital Returned to Shareholders
In the second quarter of fiscal 2025, the Company returned
In December 2024, the Board of Directors approved an increase of
In addition, the Board of Directors declared a quarterly dividend of
Updated Fiscal 2025 Outlook
The Company updated its financial targets for fiscal 2025 as follows:
-
The Company reduced its annual net sales target range to
to$6.35 billion , from a previous range of$6.45 billion to$6.6 billion to primarily reflect the increased competitive environment on price/mix and volume in its International Segment, incremental volume pressure in$6.8 billion North America , and its financial performance in the second quarter. Accordingly, the Company is targeting net sales of to$3.1 billion in the second half of fiscal 2025, or growth of approximately 1 percent to 4 percent versus the prior year period, and expects the growth will be driven by higher volume.$3.2 billion
-
The Company reduced its target ranges for GAAP net income to
to$330 million and Diluted EPS to$350 million to$2.30 , including a net loss from Restructuring Plan charges and other items impacting comparability of$2.45 ($107.9 million before-tax, or$143.9 million per share) during the first half of fiscal 2025. The Company previously targeted a GAAP net income range of$0.76 to$395 and a Diluted EPS range of$445 to$2.70 .$3.15
-
The Company reduced its Adjusted EBITDA(1) target range to
to$1,170 million from a previous target of approximately$1,210 million , to primarily reflect its financial performance in the second quarter, the reduction in forecasted sales described above, and increased manufacturing costs.$1,380 million
-
The Company reduced its Adjusted Net Income(1) target range to
to$440 million , and Adjusted Diluted EPS(1) to$460 million to$3.05 , largely reflecting the Company's lower forecast for net sales and Adjusted Gross Profit(1), as well as a higher effective tax rate. The Company previously estimated Adjusted Net Income(1) of$3.20 to$600 million and Adjusted Diluted EPS(1) of$615 million to$4.15 .$4.35
-
The Company expects to be at the top of the range for its Adjusted SG&A(1) target range of
to$680 million .$690 million
The Company's other financial targets are as follows:
-
Depreciation and amortization expense of approximately
;$375 million
- An effective tax rate(3) (full year) estimate of approximately 28 percent, excluding the impact of comparability items, which is an increase from the Company's previous estimate of approximately 25 percent; and
-
Cash used for capital expenditures, excluding acquisitions, if any, of approximately
.$750 million
End Notes
(1) |
Adjusted Gross Profit, Adjusted SG&A, Adjusted Income from Operations, Adjusted Net Income, Adjusted Diluted EPS, Adjusted Equity Method Investment Earnings, and Adjusted EBITDA, are non-GAAP financial measures. Please see the discussion of non-GAAP financial measures, including a discussion of guidance provided on a non-GAAP basis, and the associated reconciliations at the end of this press release for more information. |
|
(2) |
The Company enters into blue chip swap transactions to transfer |
|
(3) |
The effective tax rate is calculated as the ratio of income tax expense to pre-tax income, inclusive of equity method investment earnings. |
Webcast and Conference Call Information
Lamb Weston will host a conference call to review its second quarter fiscal 2025 results at 8:00 a.m. EST on December 19, 2024. Participants in the
A rebroadcast of the conference call will be available beginning on Friday, December 20, 2024, after 2:00 p.m. EST at https://investors.lambweston.com/events-and-presentations.
About Lamb Weston
Lamb Weston is a leading supplier of frozen potato products to restaurants and retailers around the world. For more than 70 years, Lamb Weston has led the industry in innovation, introducing inventive products that simplify back-of-house management for its customers and make things more delicious for their customers. From the fields where Lamb Weston potatoes are grown to proactive customer partnerships, Lamb Weston always strives for more and never settles. Because, when we look at a potato, we see possibilities. Learn more about us at lambweston.com.
Non-GAAP Financial Measures
To supplement the financial information included in this press release, the Company has presented Adjusted Gross Profit, Adjusted SG&A, Adjusted Restructuring Expense, Adjusted Income from Operations, Adjusted Income Tax Expense (Benefit), Adjusted Net Income, Adjusted Diluted EPS, Adjusted Equity Method Investment Earnings, and Adjusted EBITDA, each of which is considered a non-GAAP financial measure. The non-GAAP financial measures presented in this press release should be viewed in addition to, and not as an alternative for, financial measures prepared in accordance with accounting principles generally accepted in
Management uses these non-GAAP financial measures to assist in analyzing what management views as the Company's core operating performance for purposes of business decision making. Management believes that presenting these non-GAAP financial measures provides investors with useful supplemental information because they (i) provide meaningful supplemental information regarding financial performance by excluding impacts of foreign currency exchange rates and unrealized derivative activities and other items affecting comparability between periods, (ii) permit investors to view performance using the same tools that management uses to budget, make operating and strategic decisions, and evaluate the Company’s core operating performance across periods, and (iii) otherwise provide supplemental information that may be useful to investors in evaluating the Company's financial results. In addition, the Company believes that the presentation of these non-GAAP financial measures, when considered together with the most directly comparable GAAP financial measures and the reconciliations to those GAAP financial measures, provides investors with additional tools to understand the factors and trends affecting the Company's underlying business than could be obtained absent these disclosures.
The Company has also provided guidance in this press release with respect to certain non-GAAP financial measures, including non-GAAP Adjusted Net Income, Adjusted Diluted EPS, Adjusted SG&A, and Adjusted EBITDA. The Company cannot predict certain items that are included in reported GAAP results, including items such as strategic developments, integration and acquisition costs and related fair value adjustments, impacts of unrealized mark-to-market derivative gains and losses, foreign currency exchange, and items impacting comparability. This list is not inclusive of all potential items, and the Company intends to update the list as appropriate as these items are evaluated on an ongoing basis. In addition, the items that cannot be predicted can be highly variable and could potentially have significant impacts on the Company’s GAAP measures. As such, prospective quantification of these items is not feasible without unreasonable efforts, and a reconciliation of forward-looking non-GAAP Adjusted Net Income, Adjusted Diluted EPS, Adjusted SG&A, and Adjusted EBITDA to GAAP net income, diluted earnings per share, or SG&A has not been provided.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws. Words such as “expect,” “will,” “believe,” “take,” “generate,” “continue,” “manage,” “improve,” “reduce,” “deliver,” “drive,” “remain,” “realize,” “evaluate,” “align,” “protect,” “execute,” “make,” “estimate,” “outlook,” “target,” and variations of such words and similar expressions are intended to identify forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements regarding: the Company’s business and financial outlook and prospects; the Company’s plans and strategies and anticipated benefits therefrom, including with respect to the Restructuring Plan, expected completion and impacts of restructuring activities and cost-saving or efficiency initiatives, capital expenditures and investments, dividends, share repurchases, cash flows, conditions in the Company’s operating environment, industry and the global economy. These forward-looking statements are based on management’s current expectations and are subject to uncertainties and changes in circumstances. Readers of this press release should understand that these statements are not guarantees of performance or results. Many factors could affect these forward-looking statements and the Company’s actual financial results and cause them to vary materially from the expectations contained in the forward-looking statements, including those set forth in this press release. These risks and uncertainties include, among other things: consumer preferences, including restaurant traffic in
Lamb Weston Holdings, Inc. Consolidated Statements of Earnings (unaudited, in millions, except per share amounts) |
||||||||||||
|
Thirteen Weeks Ended |
|
Twenty-Six Weeks Ended |
|||||||||
|
November 24,
|
|
November 26,
|
|
November 24,
|
|
November 26,
|
|||||
Net sales |
$ |
1,600.9 |
|
|
$ |
1,732.1 |
|
$ |
3,255.0 |
|
$ |
3,397.4 |
Cost of sales (1) (2) |
|
1,323.1 |
|
|
|
1,256.5 |
|
|
2,621.2 |
|
|
2,422.3 |
Gross profit |
|
277.8 |
|
|
|
475.6 |
|
|
633.8 |
|
|
975.1 |
Selling, general and administrative expenses (3) |
|
184.7 |
|
|
|
170.0 |
|
|
328.6 |
|
|
346.2 |
Restructuring expense (1) |
|
74.6 |
|
|
|
— |
|
|
74.6 |
|
|
— |
Income from operations |
|
18.5 |
|
|
|
305.6 |
|
|
230.6 |
|
|
628.9 |
Interest expense, net |
|
43.3 |
|
|
|
29.1 |
|
|
88.5 |
|
|
59.8 |
Income (loss) before income taxes and equity method earnings |
|
(24.8 |
) |
|
|
276.5 |
|
|
142.1 |
|
|
569.1 |
Income tax expense |
|
13.4 |
|
|
|
66.2 |
|
|
64.2 |
|
|
136.1 |
Equity method investment earnings (1) |
|
2.1 |
|
|
|
4.7 |
|
|
13.4 |
|
|
16.8 |
Net income (loss) (1) (4) |
$ |
(36.1 |
) |
|
$ |
215.0 |
|
$ |
91.3 |
|
$ |
449.8 |
Earnings (loss) per share: |
|
|
|
|
|
|
|
|||||
Basic |
$ |
(0.25 |
) |
|
$ |
1.48 |
|
$ |
0.64 |
|
$ |
3.10 |
Diluted |
$ |
(0.25 |
) |
|
$ |
1.48 |
|
$ |
0.64 |
|
$ |
3.08 |
Dividends declared per common share |
$ |
0.36 |
|
|
$ |
0.28 |
|
$ |
0.72 |
|
$ |
0.56 |
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|||||
Basic |
|
142.8 |
|
|
|
144.9 |
|
|
143.2 |
|
|
145.3 |
Diluted |
|
143.2 |
|
|
|
145.5 |
|
|
143.7 |
|
|
146.0 |
_______________________________________________ |
||||
(1) |
Net income (loss) for the thirteen and twenty-six weeks ended November 24, 2024 included the following related to the Restructuring Plan: |
|||
|
a. |
Total pre-tax charges totaling |
||
|
b. |
Cost of sales included a |
||
|
c. |
Restructuring expense included a |
||
|
d. |
Equity method investment earnings included |
||
(2) |
Cost of sales for the thirteen and twenty-six weeks ended November 24, 2024 included |
|||
|
The thirteen and twenty-six weeks ended November 26, 2023 included |
|||
(3) |
Selling, general and administrative expenses (SG&A) included the following: |
|||
|
a. |
Blue chip swap transaction gains of |
||
|
b. |
Unrealized losses related to mark-to-market adjustments associated with currency hedging contracts of |
||
|
c. |
Foreign currency exchange losses of |
||
|
d. |
Advisory fees related to shareholder activism matters of |
||
|
e. |
Integration and acquisition-related expenses of |
||
(4) |
The twenty-six weeks ended November 24, 2024 include an approximately |
Lamb Weston Holdings, Inc. Consolidated Balance Sheets (unaudited, in millions, except share data) |
|||||||
|
November 24,
|
|
May 26,
|
||||
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
79.0 |
|
|
$ |
71.4 |
|
Receivables, net of allowances of |
|
695.0 |
|
|
|
743.6 |
|
Inventories |
|
1,327.2 |
|
|
|
1,138.6 |
|
Prepaid expenses and other current assets |
|
89.7 |
|
|
|
136.4 |
|
Total current assets |
|
2,190.9 |
|
|
|
2,090.0 |
|
Property, plant and equipment, net |
|
3,609.6 |
|
|
|
3,582.8 |
|
Operating lease assets |
|
119.7 |
|
|
|
133.0 |
|
Goodwill |
|
1,028.3 |
|
|
|
1,059.9 |
|
Intangible assets, net |
|
101.0 |
|
|
|
104.9 |
|
Other assets |
|
402.6 |
|
|
|
396.4 |
|
Total assets |
$ |
7,452.1 |
|
|
$ |
7,367.0 |
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Short-term borrowings |
$ |
320.5 |
|
|
$ |
326.3 |
|
Current portion of long-term debt and financing obligations |
|
69.7 |
|
|
|
56.4 |
|
Accounts payable |
|
846.0 |
|
|
|
833.8 |
|
Accrued liabilities |
|
390.8 |
|
|
|
407.6 |
|
Total current liabilities |
|
1,627.0 |
|
|
|
1,624.1 |
|
Long-term liabilities: |
|
|
|
||||
Long-term debt and financing obligations, excluding current portion |
|
3,693.6 |
|
|
|
3,440.7 |
|
Deferred income taxes |
|
247.3 |
|
|
|
256.2 |
|
Other noncurrent liabilities |
|
251.4 |
|
|
|
258.2 |
|
Total long-term liabilities |
|
4,192.3 |
|
|
|
3,955.1 |
|
Commitments and contingencies |
|
|
|
||||
Stockholders’ equity: |
|
|
|
||||
Common stock of |
|
151.3 |
|
|
|
150.7 |
|
Treasury stock, at cost, 8,669,325 and 7,068,741 common shares |
|
(634.4 |
) |
|
|
(540.9 |
) |
Additional distributed capital |
|
(497.3 |
) |
|
|
(508.9 |
) |
Retained earnings |
|
2,687.2 |
|
|
|
2,699.8 |
|
Accumulated other comprehensive loss |
|
(74.0 |
) |
|
|
(12.9 |
) |
Total stockholders’ equity |
|
1,632.8 |
|
|
|
1,787.8 |
|
Total liabilities and stockholders’ equity |
$ |
7,452.1 |
|
|
$ |
7,367.0 |
|
Lamb Weston Holdings, Inc. Consolidated Statements of Cash Flows (unaudited, in millions) |
|||||||
|
Twenty-Six Weeks Ended |
||||||
|
November 24,
|
|
November 26,
|
||||
Cash flows from operating activities |
|
|
|
||||
Net income |
$ |
91.3 |
|
|
$ |
449.8 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization of intangibles and debt issuance costs |
|
211.0 |
|
|
|
140.7 |
|
Stock-settled, stock-based compensation expense |
|
21.9 |
|
|
|
22.2 |
|
Equity method investment (earnings) loss, net of distributions |
|
11.5 |
|
|
|
(11.3 |
) |
Deferred income taxes |
|
1.4 |
|
|
|
5.8 |
|
Blue chip swap transaction gains |
|
(19.9 |
) |
|
|
(7.1 |
) |
Other |
|
15.6 |
|
|
|
5.7 |
|
Changes in operating assets and liabilities: |
|
|
|
||||
Receivables |
|
39.0 |
|
|
|
(35.2 |
) |
Inventories |
|
(198.2 |
) |
|
|
(216.0 |
) |
Income taxes payable/receivable, net |
|
(25.1 |
) |
|
|
27.6 |
|
Prepaid expenses and other current assets |
|
75.2 |
|
|
|
68.8 |
|
Accounts payable |
|
216.8 |
|
|
|
96.1 |
|
Accrued liabilities |
|
(11.2 |
) |
|
|
(91.9 |
) |
Net cash provided by operating activities |
$ |
429.3 |
|
|
$ |
455.2 |
|
Cash flows from investing activities |
|
|
|
||||
Additions to property, plant and equipment |
|
(474.6 |
) |
|
|
(507.6 |
) |
Additions to other long-term assets |
|
(31.7 |
) |
|
|
(58.9 |
) |
Acquisition of business, net of cash acquired |
|
— |
|
|
|
(11.2 |
) |
Proceeds from blue chip swap transactions, net of purchases |
|
19.9 |
|
|
|
7.1 |
|
Other |
|
1.5 |
|
|
|
(0.2 |
) |
Net cash used for investing activities |
$ |
(484.9 |
) |
|
$ |
(570.8 |
) |
Cash flows from financing activities |
|
|
|
||||
Proceeds from short-term borrowings |
|
811.6 |
|
|
|
194.3 |
|
Repayments of short-term borrowings |
|
(813.8 |
) |
|
|
(60.6 |
) |
Proceeds from issuance of debt |
|
520.2 |
|
|
|
28.4 |
|
Repayments of debt and financing obligations |
|
(245.4 |
) |
|
|
(27.7 |
) |
Dividends paid |
|
(103.3 |
) |
|
|
(81.6 |
) |
Repurchase of common stock and common stock withheld to cover taxes |
|
(92.8 |
) |
|
|
(164.3 |
) |
Other |
|
(13.2 |
) |
|
|
(0.5 |
) |
Net cash provided by (used for) financing activities |
$ |
63.3 |
|
|
$ |
(112.0 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
(0.1 |
) |
|
|
1.1 |
|
Net increase (decrease) in cash and cash equivalents |
|
7.6 |
|
|
|
(226.5 |
) |
Cash and cash equivalents, beginning of period |
|
71.4 |
|
|
|
304.8 |
|
Cash and cash equivalents, end of period |
$ |
79.0 |
|
|
$ |
78.3 |
|
Lamb Weston Holdings, Inc. Segment Information (unaudited, in millions, except percentages) |
||||||||||||||
|
Thirteen Weeks Ended |
|||||||||||||
|
November 24,
|
|
November 26,
|
|
% Increase (Decrease) |
|
Price/Mix |
|
Volume |
|||||
Segment net sales |
|
|
|
|
|
|
|
|
|
|||||
|
$ |
1,072.1 |
|
$ |
1,167.1 |
|
(8 |
%) |
|
(3 |
%) |
|
(5 |
%) |
International |
|
528.8 |
|
|
565.0 |
|
(6 |
%) |
|
— |
% |
|
(6 |
%) |
|
$ |
1,600.9 |
|
$ |
1,732.1 |
|
(8 |
%) |
|
(2 |
%) |
|
(6 |
%) |
|
|
|
|
|
|
|
|
|
|
|||||
Segment Adjusted EBITDA (1) |
|
|
|
|
|
|
|
|
|
|||||
|
$ |
266.7 |
|
$ |
321.3 |
|
(17 |
%) |
|
|
|
|
||
International |
|
47.4 |
|
|
100.2 |
|
(53 |
%) |
|
|
|
|
|
|
Twenty-Six Weeks Ended |
|||||||||||||
|
|
November 24,
|
|
November 26,
|
|
%
|
|
Price/Mix |
|
Volume |
|||||
Segment net sales |
|
|
|
|
|
|
|
|
|
|
|||||
|
|
$ |
2,175.8 |
|
$ |
2,302.5 |
|
(6 |
%) |
|
(1 |
%) |
|
(5 |
%) |
International |
|
|
1,079.2 |
|
|
1,094.9 |
|
(1 |
%) |
|
1 |
% |
|
(2 |
%) |
|
|
$ |
3,255.0 |
|
$ |
3,397.4 |
|
(4 |
%) |
|
— |
% |
|
(4 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|||||
Segment Adjusted EBITDA (1)(2) |
|
|
|
|
|
|
|
|
|
|
|||||
|
|
$ |
542.8 |
|
$ |
700.7 |
|
(23 |
%) |
|
|
|
|
||
International |
|
|
97.9 |
|
|
189.8 |
|
(48 |
%) |
|
|
|
|
______________________________________________ |
||
(1) |
Segment Adjusted EBITDA includes equity method investment earnings and losses and excludes unallocated corporate costs including restructuring-related expenses, foreign currency exchange gains and losses, unrealized mark-to-market derivative gains and losses, and items discussed in footnotes (1) - (4) to the Consolidated Statements of Earnings. |
|
(2) |
Includes an approximately |
Lamb Weston Holdings, Inc. Reconciliation of Non-GAAP Financial Measures (unaudited, in millions, except per share amounts) |
||||||||||||||||||||||||||||||||||
Thirteen Weeks Ended November 24, 2024 |
|
Gross Profit |
|
SG&A |
|
Restructuring
|
|
Income From Operations |
|
Interest Expense |
|
Income Tax Expense (Benefit) (1) |
|
Equity Method Investment Earnings |
|
Net Income (Loss) |
|
Diluted EPS |
||||||||||||||||
As reported |
|
$ |
277.8 |
|
|
$ |
184.7 |
|
|
$ |
74.6 |
|
|
$ |
18.5 |
|
|
$ |
43.3 |
|
$ |
13.4 |
|
|
$ |
2.1 |
|
$ |
(36.1 |
) |
|
$ |
(0.25 |
) |
Unrealized derivative gains and losses (2) |
|
|
(9.8 |
) |
|
|
(12.8 |
) |
|
|
— |
|
|
|
3.0 |
|
|
|
— |
|
|
0.8 |
|
|
|
— |
|
|
2.2 |
|
|
|
0.02 |
|
Foreign currency exchange losses (2) |
|
|
— |
|
|
|
(9.6 |
) |
|
|
— |
|
|
|
9.6 |
|
|
|
— |
|
|
2.4 |
|
|
|
— |
|
|
7.2 |
|
|
|
0.05 |
|
Blue chip swap transaction gains (2) |
|
|
— |
|
|
|
3.3 |
|
|
|
— |
|
|
|
(3.3 |
) |
|
|
— |
|
|
(0.6 |
) |
|
|
— |
|
|
(2.7 |
) |
|
|
(0.02 |
) |
Items impacting comparability (2): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Restructuring Plan expenses |
|
|
75.5 |
|
|
|
— |
|
|
|
(74.6 |
) |
|
|
150.1 |
|
|
|
— |
|
|
35.5 |
|
|
|
9.0 |
|
|
123.6 |
|
|
|
0.86 |
|
Shareholder activism expense (4) |
|
|
— |
|
|
|
(0.4 |
) |
|
|
— |
|
|
|
0.4 |
|
|
|
— |
|
|
0.1 |
|
|
|
— |
|
|
0.3 |
|
|
|
— |
|
Total adjustments |
|
|
65.7 |
|
|
|
(19.5 |
) |
|
|
(74.6 |
) |
|
|
159.8 |
|
|
|
— |
|
|
38.2 |
|
|
|
9.0 |
|
|
130.6 |
|
|
|
0.91 |
|
Adjusted (3) |
|
$ |
343.5 |
|
|
$ |
165.2 |
|
|
$ |
— |
|
|
$ |
178.3 |
|
|
$ |
43.3 |
|
$ |
51.6 |
|
|
$ |
11.1 |
|
$ |
94.5 |
|
|
$ |
0.66 |
|
Thirteen Weeks Ended November 26, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
As reported |
|
$ |
475.6 |
|
|
$ |
170.0 |
|
|
$ |
— |
|
$ |
305.6 |
|
|
$ |
29.1 |
|
$ |
66.2 |
|
|
$ |
4.7 |
|
$ |
215.0 |
|
|
$ |
1.48 |
|
|
Unrealized derivative gains and losses (2) |
|
|
4.6 |
|
|
|
3.0 |
|
|
|
— |
|
|
1.6 |
|
|
|
— |
|
|
0.3 |
|
|
|
— |
|
|
1.3 |
|
|
|
0.01 |
|
|
Foreign currency exchange gains (2) |
|
|
— |
|
|
|
2.1 |
|
|
|
— |
|
|
(2.1 |
) |
|
|
— |
|
|
(0.5 |
) |
|
|
— |
|
|
(1.6 |
) |
|
|
(0.01 |
) |
|
Blue chip swap transaction gains (2) |
|
|
— |
|
|
|
7.1 |
|
|
|
— |
|
|
(7.1 |
) |
|
|
— |
|
|
(1.8 |
) |
|
|
— |
|
|
(5.3 |
) |
|
|
(0.04 |
) |
|
Items impacting comparability (2): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Inventory step-up from acquisition |
|
|
(1.8 |
) |
|
|
— |
|
|
|
— |
|
|
(1.8 |
) |
|
|
— |
|
|
(0.5 |
) |
|
|
— |
|
|
(1.3 |
) |
|
|
(0.01 |
) |
|
Integration and acquisition-related items, net |
|
|
— |
|
|
|
(4.8 |
) |
|
|
— |
|
|
4.8 |
|
|
|
— |
|
|
1.2 |
|
|
|
— |
|
|
3.6 |
|
|
|
0.02 |
|
|
Total adjustments |
|
|
2.8 |
|
|
|
7.4 |
|
|
|
— |
|
|
(4.6 |
) |
|
|
— |
|
|
(1.3 |
) |
|
|
— |
|
|
(3.3 |
) |
|
|
(0.03 |
) |
|
Adjusted (3) |
|
$ |
478.4 |
|
|
$ |
177.4 |
|
|
$ |
— |
|
$ |
301.0 |
|
|
$ |
29.1 |
|
$ |
64.9 |
|
|
$ |
4.7 |
|
$ |
211.7 |
|
|
$ |
1.45 |
|
Lamb Weston Holdings, Inc. Reconciliation of Non-GAAP Financial Measures (unaudited, in millions, except per share amounts) |
||||||||||||||||||||||||||||||||||
Twenty-Six Weeks Ended November 24, 2024 |
|
Gross Profit |
|
SG&A |
|
Restructuring
|
|
Income From Operations |
|
Interest Expense |
|
Income Tax Expense (Benefit) (1) |
|
Equity Method Investment Earnings |
|
Net (Loss) Income |
|
Diluted EPS |
||||||||||||||||
As reported |
|
$ |
633.8 |
|
|
$ |
328.6 |
|
|
$ |
74.6 |
|
|
$ |
230.6 |
|
|
$ |
88.5 |
|
$ |
64.2 |
|
|
$ |
13.4 |
|
$ |
91.3 |
|
|
$ |
0.64 |
|
Unrealized derivative gains and losses (2) |
|
|
(12.7 |
) |
|
|
(6.8 |
) |
|
|
— |
|
|
|
(5.9 |
) |
|
|
— |
|
|
(1.6 |
) |
|
|
— |
|
|
(4.3 |
) |
|
|
(0.02 |
) |
Foreign currency exchange losses (2) |
|
|
— |
|
|
|
(10.2 |
) |
|
|
— |
|
|
|
10.2 |
|
|
|
— |
|
|
2.6 |
|
|
|
— |
|
|
7.6 |
|
|
|
0.05 |
|
Blue chip swap transaction gains (2) |
|
|
— |
|
|
|
19.9 |
|
|
|
— |
|
|
|
(19.9 |
) |
|
|
— |
|
|
(0.6 |
) |
|
|
— |
|
|
(19.3 |
) |
|
|
(0.13 |
) |
Items impacting comparability (2): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Restructuring Plan expenses |
|
|
75.5 |
|
|
|
— |
|
|
|
(74.6 |
) |
|
|
150.1 |
|
|
|
— |
|
|
35.5 |
|
|
|
9.0 |
|
|
123.6 |
|
|
|
0.86 |
|
Shareholder activism expense (4) |
|
|
— |
|
|
|
(0.4 |
) |
|
|
— |
|
|
|
0.4 |
|
|
|
— |
|
|
0.1 |
|
|
|
— |
|
|
0.3 |
|
|
|
— |
|
Total adjustments |
|
|
62.8 |
|
|
|
2.5 |
|
|
|
(74.6 |
) |
|
|
134.9 |
|
|
|
— |
|
|
36.0 |
|
|
|
9.0 |
|
|
107.9 |
|
|
|
0.76 |
|
Adjusted (3) |
|
$ |
696.6 |
|
|
$ |
331.1 |
|
|
$ |
— |
|
|
$ |
365.5 |
|
|
$ |
88.5 |
|
$ |
100.2 |
|
|
$ |
22.4 |
|
$ |
199.2 |
|
|
$ |
1.40 |
|
Twenty-Six Weeks Ended November 26, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
As reported |
|
$ |
975.1 |
|
|
$ |
346.2 |
|
|
$ |
— |
|
$ |
628.9 |
|
|
$ |
59.8 |
|
$ |
136.1 |
|
|
$ |
16.8 |
|
$ |
449.8 |
|
|
$ |
3.08 |
|
|
Unrealized derivative gains and losses (2) |
|
|
(27.1 |
) |
|
|
(1.4 |
) |
|
|
— |
|
|
(25.7 |
) |
|
|
— |
|
|
(6.5 |
) |
|
|
— |
|
|
(19.2 |
) |
|
|
(0.13 |
) |
|
Foreign currency exchange losses (2) |
|
|
— |
|
|
|
(5.3 |
) |
|
|
— |
|
|
5.3 |
|
|
|
— |
|
|
1.4 |
|
|
|
— |
|
|
3.9 |
|
|
|
0.03 |
|
|
Blue chip swap transaction gains (2) |
|
|
— |
|
|
|
7.1 |
|
|
|
— |
|
|
(7.1 |
) |
|
|
— |
|
|
(1.8 |
) |
|
|
— |
|
|
(5.3 |
) |
|
|
(0.04 |
) |
|
Items impacting comparability (2): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Inventory step-up from acquisition |
|
|
20.7 |
|
|
|
— |
|
|
|
— |
|
|
20.7 |
|
|
|
— |
|
|
5.3 |
|
|
|
— |
|
|
15.4 |
|
|
|
0.11 |
|
|
Integration and acquisition-related items, net |
|
|
— |
|
|
|
(8.8 |
) |
|
|
— |
|
|
8.8 |
|
|
|
— |
|
|
2.2 |
|
|
|
— |
|
|
6.6 |
|
|
|
0.04 |
|
|
Total adjustments |
|
|
(6.4 |
) |
|
|
(8.4 |
) |
|
|
— |
|
|
2.0 |
|
|
|
— |
|
|
0.6 |
|
|
|
— |
|
|
1.4 |
|
|
|
0.01 |
|
|
Adjusted (3) |
|
$ |
968.7 |
|
|
$ |
337.8 |
|
|
$ |
— |
|
$ |
630.9 |
|
|
$ |
59.8 |
|
$ |
136.7 |
|
|
$ |
16.8 |
|
$ |
451.2 |
|
|
$ |
3.09 |
|
______________________________________________ |
||
(1) |
Items are tax effected at the marginal rate based on the applicable tax jurisdiction. |
|
(2) |
See footnotes (1) - (4) to the Consolidated Statements of Earnings for a discussion of the adjustment items. |
|
(3) |
See “Non-GAAP Financial Measures” in this press release for additional information. |
|
(4) |
Represents advisory fees related to shareholder activism matters. |
Lamb Weston Holdings, Inc.
Reconciliation of Non-GAAP Financial Measures
(unaudited, in millions)
To supplement the financial information included in this press release, the Company is presenting Adjusted EBITDA, which the Company defines as earnings, less interest expense, income tax expense, depreciation and amortization, foreign currency exchange and unrealized mark-to-market derivative gains and losses, and certain items impacting comparability identified in the table below. Adjusted EBITDA is a non-GAAP financial measure. The following table reconciles net (loss) income to Adjusted EBITDA for the identified periods.
|
|
Thirteen Weeks Ended |
|
Twenty-Six Weeks Ended |
||||||||||||
|
|
November 24,
|
|
November 26,
|
|
November 24,
|
|
November 26,
|
||||||||
Net income (loss) (1) |
|
$ |
(36.1 |
) |
|
$ |
215.0 |
|
|
$ |
91.3 |
|
|
$ |
449.8 |
|
Interest expense, net |
|
|
43.3 |
|
|
|
29.1 |
|
|
|
88.5 |
|
|
|
59.8 |
|
Income tax expense |
|
|
13.4 |
|
|
|
66.2 |
|
|
|
64.2 |
|
|
|
136.1 |
|
Income from operations including equity method investment earnings (2) |
|
|
20.6 |
|
|
|
310.3 |
|
|
|
244.0 |
|
|
|
645.7 |
|
Depreciation and amortization (3) |
|
|
92.5 |
|
|
|
71.2 |
|
|
|
183.9 |
|
|
|
142.0 |
|
Unrealized derivative losses (gains) (1) |
|
|
3.0 |
|
|
|
1.6 |
|
|
|
(5.9 |
) |
|
|
(25.7 |
) |
Foreign currency exchange losses (gains) (1) |
|
|
9.6 |
|
|
|
(2.1 |
) |
|
|
10.2 |
|
|
|
5.3 |
|
Blue chip swap transaction gains (1) |
|
|
(3.3 |
) |
|
|
(7.1 |
) |
|
|
(19.9 |
) |
|
|
(7.1 |
) |
Items impacting comparability (1): |
|
|
|
|
|
|
|
|
||||||||
Restructuring Plan expenses (4) |
|
|
159.1 |
|
|
|
— |
|
|
|
159.1 |
|
|
|
— |
|
Shareholder activism expense (5) |
|
|
0.4 |
|
|
|
— |
|
|
|
0.4 |
|
|
|
— |
|
Inventory step-up from acquisition |
|
|
— |
|
|
|
(1.8 |
) |
|
|
— |
|
|
|
20.7 |
|
Integration and acquisition-related items, net |
|
|
— |
|
|
|
4.8 |
|
|
|
— |
|
|
|
8.8 |
|
Adjusted EBITDA (6) |
|
$ |
281.9 |
|
|
$ |
376.9 |
|
|
$ |
571.8 |
|
|
$ |
789.7 |
|
|
|
|
|
|
|
|
|
|
||||||||
Segment Adjusted EBITDA |
|
|
|
|
|
|
|
|
||||||||
|
|
$ |
266.7 |
|
|
$ |
321.3 |
|
|
$ |
542.8 |
|
|
$ |
700.7 |
|
International |
|
|
47.4 |
|
|
|
100.2 |
|
|
|
97.9 |
|
|
|
189.8 |
|
Unallocated corporate costs (7) |
|
|
(32.2 |
) |
|
|
(44.6 |
) |
|
|
(68.9 |
) |
|
|
(100.8 |
) |
Adjusted EBITDA |
|
$ |
281.9 |
|
|
$ |
376.9 |
|
|
$ |
571.8 |
|
|
$ |
789.7 |
|
_______________________________________________
(1) |
See footnotes (1) - (4) to the Consolidated Statements of Earnings for more information. |
|
(2) |
Lamb Weston holds a 50 percent equity interest in a |
|
(3) |
Depreciation and amortization included interest expense, income tax expense, and depreciation and amortization from equity method investments of |
|
(4) |
On October 1, 2024, the Company announced the Restructuring Plan. For more information about the Restructuring Plan, see Note 4, Restructuring Plan, of the Condensed Notes to Consolidated Financial Statements in the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended November 24, 2024, to be filed with the SEC. |
|
(5) |
Represents advisory fees related to shareholder activism matters. |
|
(6) |
See “Non-GAAP Financial Measures” in this press release for additional information. |
|
(7) |
The Company’s two segments include corporate support staff and services that are directly allocable to those segments. Unallocated corporate costs include costs related to corporate support staff and support service, which includes, but are not limited to, the Company's administrative, information technology, human resources, finance, and accounting functions that are not specifically allocated to the segments. In the table, Unallocated corporate costs exclude unrealized derivative gains and losses, foreign currency exchange gains and losses, blue chip swap transaction gains, and items impacting comparability. These items are added back to reconcile Net income (loss) to Adjusted EBITDA. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241219795808/en/
Investors:
Dexter Congbalay
224-306-1535
dexter.congbalay@lambweston.com
Media:
Erin Gardiner
208-202-7257
communication@lambweston.com
Source: Lamb Weston Holdings, Inc.