Why Lamb Weston Holdings Shares Are Rising Today

Lamb Weston Holdings, Inc. LW shares are trading higher on Thursday after the company reported street-beating results in the second quarter.

The company reported second-quarter sales of $1.732 billion (+36% Y/Y), beating the analyst consensus of $1.70 billion. Adjusted EPS of $1.45 beats the analyst consensus of $1.41.

The company said it benefited from inflation-driven pricing actions primarily initiated last year, customer and product mix improvements and supply chain productivity cost savings. However, the quarterly results included a $71 million pre-tax charge for the write-off of excess raw potatoes.

Gross profit increased $94 million versus the prior year quarter to $475.6 million and included $1.8 million of benefits.

Adjusted Income from operations increased 22% to $301.0 million, driven by higher sales and gross profit. Adjusted EBITDA increased 15% to $376.9 million.

LW repurchased $50 million of common stock and paid $41 million in cash dividends.

The company announced a 29% increase in quarterly dividend to $0.36 per share, payable on March 1, 2024, to stockholders of record on Feb. 2, 2024.

Outlook: Lamb Weston reaffirmed its FY24 net sales target of $6.8 billion to $7.0 billion (consensus estimate at $6.89 billion).

The company raised FY24 diluted EPS target to $5.70-$6.15 from $5.47-$5.92 versus the estimate of $5.9.

LW Price Action: Lamb Weston shares are trading higher by 0.27% to $105.21 on the last check Thursday. 

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