Lamb Weston Holdings (New York stock market :L.W.) the stock rallied strongly on Wednesday after reporting better-than-expected results and reaffirming its outlook for the full year.
For its first fiscal quarter, the potato products supplier posted an adjusted profit of $0.75 per share alongside $1.13 billion in revenue. Analysts had forecast $0.50 billion and $1.12 billion, respectively. Additionally, the company noted that it was able to promote gross margin improvement despite “great operational challenges, including labor and raw material shortages, resulting from the volatility of the broader supply chain” that have achieved the metric.
“We generated strong sales, profit growth and gross margin growth during the quarter by executing pricing actions in each of our business segments and generating manufacturing cost savings to counter the inflation,” said CEO Tom Werner. “While volume declined due to lower restaurant traffic trends and supply chain constraints that impacted production rates at our factories, we continued to make progress in the improved levels of customer service.”
He added that the company remains on track to meet its fiscal 2023 targets as its expansion in Argentina and investments in China are expected to pay long-term dividends. Additionally, Werner touted the “high quality” of current potato crops.
Management reaffirmed its outlook for net sales of $4.7 billion to $4.8 billion, in line with analyst consensus, and adjusted diluted EPS of $2.45 to $2.85 from consensus of $2.80.
Shares of Lamb Weston holdings (L.W.) Pink 3.33% shortly after Wednesday’s market opens.
Dig into the results details.