Lamb Weston Holdings, Inc. (NYSE:LW) Sees 2.75% Drop

Shares of Lamb Weston Holdings, Inc. (NYSE:LW) experienced a 2.75% decline on Friday, raising questions regarding the company's decision to release its fiscal 2025 second quarter results earlier than usual. Traditionally, Lamb Weston announces its second quarter earnings in the first week of January. However, this year, the report is set for Thursday, December 19, 2024. This change has sparked curiosity, especially given Lamb Weston's history with activist investor Jana.

Analyst Insights on Financial Outlook

In anticipation of the earnings release, analysts have shared their perspectives on Lamb Weston's financial outlook.

Bernstein SocGen Group

• Alexia Howard expressed concerns about potential downside risks to the market's expectations for the next quarter.
• She predicts Lamb Weston's gross margins may suffer due to:
  • Higher inventory costs
  • Negative price/mix in North America
  • Operational deleveraging
• Howard anticipates gross margins could fall to 22.4%, compared to the consensus estimate of 24.5%.
• Earnings per share (EPS) is forecasted at $0.86, which is $0.19 lower than the consensus of $1.05.

TD Cowen

• Robert Moskow provided insights suggesting a more cautious sales estimate for fiscal year 2025, sitting 0.5% below the consensus.
• His estimate is slightly under the midpoint of the company’s guidance, reflecting concerns regarding expected market share gains.
• While he anticipates in-line results for the second quarter, he believes the third quarter consensus expectation of 11% is overly ambitious.
• He noted that the projected pace of recovery might be too optimistic, despite activist pressure for management to enhance performance.

Conclusion

Investors and stakeholders are keenly awaiting the early earnings report to gain clarity on Lamb Weston’s financial health and future prospects.

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