Lamb Weston Boosts Share Buyback Program, Provides Long-Term Outlook & More

Frozen potato products supplier Lamb Weston Holdings Inc LW provided long-term financial targets, reiterated the FY24 outlook, and boosted share repurchase authorization.

LW expects net sales growth in the low-to-mid-single digits and adjusted EPS growth in the high single digits. The company assumes benefiting from higher volumes, positive net price realization, improved mix, supply chain productivity, and SG&A leverage.

The company continues to expect net sales of $6.8 billion-$7.0 billion (vs. street view of $6.87 billion), adjusted EBITDA of $1.54 billion- $1.62 billion, and adjusted EPS of $5.50-$5.95 (vs. consensus of $5.77).

The Board of Directors raised the share repurchase authorization to $500 million, which includes the remaining unused capacity of around $124 million under the previous repurchase authorization program.

Since 2016, the company returned over $1.2 billion to shareholders through share repurchases and dividends.

"Over the last several years, Lamb Weston has strengthened our position as a leading global producer, distributor and marketer of frozen potato products. Our global supply chain optimization and disciplined, results-driven capital allocation strategy have created a more profitable, high-growth business that we believe is well-positioned to support customers, leverage our global scale and create value for our shareholders. We are confident in our ability to build on our strong foundation, and remain committed to investing in our business to support sustainable, profitable growth over the long term," stated Tom Werner, President and CEO.

Last week, LW reported first-quarter FY24 sales growth of 48% year-on-year to $1.67 billion, beating the analyst consensus estimate of $1.62 billion. Adjusted EPS of $1.63 beat the analyst consensus of $1.08.

Price Action: LW shares are trading lower by 2.03% at $94.41 on the last check Wednesday.