Lamb Weston Holdings, Inc. LW reported solid fourth-quarter fiscal 2026 results, wherein both top and bottom lines beat the Zacks Consensus Estimate. While net sales increased, earnings decreased from the year-ago period’s actuals.
LW’s adjusted earnings were 87 cents per share, down 5% year over year. However, the bottom line beats the Zacks Consensus Estimate of 62 cents.
Lamb Weston Price, Consensus and EPS Surprise
Lamb Weston price-consensus-eps-surprise-chart | Lamb Weston Quote
Net sales amounted to $1,770.1 million, beating the Zacks Consensus Estimate of $1,701 million. The top line increased 6% year over year, driven by a 7% increase in sales volume, a 2% favorable currency impact and the benefit of an extra week, partially offset by a 3% decline in price/mix. Sales volume increased for the sixth consecutive quarter. Our model suggested a volume increase of 1.9% in the quarter.
LW’s Quarterly Results: Key Metrics & Insights
Adjusted gross profit decreased 0.2% year over year to $342.9 million. The adjusted gross margin decreased 110 basis points (bps) to 19.4%. Our model projected adjusted gross margin contraction of about 220 basis points to 18.4%.
Adjusted SG&A expenses were up 11.1% to $163.5 million from $147.1 million reported in the year-ago quarter. As a percentage of sales, the same increased 40 bps to 9.2%.
Adjusted EBITDA declined 2% to $287.6 million, while adjusted EBITDA margin contracted 130 bps to 16.2%.
LW Provides Q4 Insights by Segment
Net sales for the North America segment increased 9% to $1,206.2 million compared with the prior-year quarter, driven by 11% sales volume growth, marking the sixth consecutive quarter of volume growth. This increase was fueled by customer contract wins, market share gains, strong customer retention and the benefit of an additional week. The segment’s price/mix declined 2%, reflecting modest pricing and trade support for customers, as well as an ongoing mix shift toward faster-growing chain customers and private-label products.
The North America segment adjusted EBITDA increased 17% to $304.7 million, driven by higher sales volumes and lower manufacturing costs per pound, reflecting operating leverage from cost savings initiatives and improved manufacturing efficiencies. These benefits more than offset inflationary pressures, unfavorable price/mix and higher operating expenses.
Net sales for the International segment declined 2% to $563.9 million, reflecting a 2% decrease in sales volume and a 4% decline in price/mix, partially offset by a favorable foreign currency impact. Growth in Asia Pacific and Latin America, along with the benefit of an additional week, was more than offset by challenging market conditions in EMEA, including the impact of the Middle East conflict that began early in the fourth quarter of fiscal 2026.
International segment adjusted EBITDA fell 81% to $11.8 million, primarily due to lower net sales, higher manufacturing costs per pound and increased operating expenses.
Lamb Weston’s Financial Health Snapshot
The company ended the quarter with cash and cash equivalents of $68.2 million, long-term debt and financing obligations (excluding the current portion) of $3,595.2 million and total shareholders’ equity of $1,824.9 million.
Lamb Weston generated $942.9 million as net cash from operating activities for fiscal 2026, wherein capital expenditures amounted to $410.1 million.
In the fourth quarter of fiscal 2026, Lamb Weston returned $116 million to its shareholders through cash dividends and stock repurchases.
On July 23, management declared a quarterly dividend of 38 cents per share, payable on Sept. 4, to its shareholders of record as of Aug. 7, 2026.
What to Expect From LW in FY27?
For fiscal 2027, Lamb Weston expects net sales to be flat to 1% growth over the adjusted fiscal 2026 52-week base of $6.5 billion. The company expects adjusted EBITDA to be between $1.1 billion and $1.2 billion, while adjusted EPS is projected at $2.95 to $3.25, compared with $3.01 in fiscal 2026. Capital expenditures are expected to be $380 million to $410 million.
LW’s Share Price Performance
Shares of this Zacks Rank #3 (Hold) company have gained 13.5% in the past three months compared with the industry’s 5.8% growth.
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Stocks to Consider
United Natural Foods, Inc. UNFI distributes natural, organic, specialty, produce and conventional grocery and non-food products in the United States and Canada. At present, United Natural sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for United Natural’s current fiscal-year earnings implies growth of 254.9% from the year-ago figures. UNFI delivered a trailing four-quarter earnings surprise of 29.9%, on average.
Mama's Creations, Inc. MAMA manufactures and markets fresh deli-prepared foods in the United States. At present, MAMA holds a Zacks Rank of 2 (Buy). Mama's Creations delivered a trailing four-quarter earnings surprise of 129.2%, on average.
The consensus estimate for Mama's Creations’ current fiscal-year sales and earnings implies growth of 30% and 73.3%, respectively, from the year-ago figures.
Hormel Foods Corporation HRL develops, processes and distributes various meat, nuts and other food products to foodservice, convenience store and commercial customers in the United States and internationally. It carries a Zacks Rank of 2 at present. HRL delivered a trailing four-quarter earnings surprise of 3.2%, on average.
The Zacks Consensus Estimate for Hormel Foods’ current fiscal-year sales and earnings indicates growth of 1.4% and 9.5%, respectively, from the prior-year reported levels.
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This article originally published on Zacks Investment Research (zacks.com).