Lamb Weston Holdings today (5 October) lifted its forecast for full-year earnings after a quarter boosted by price increases.

The US-based frozen-foods group expects its net income to come in between $800m and $870m in its 2024 fiscal year. The company also estimates its diluted earnings per share will be between $5.47 and $5.92.

Lamb Weston had previously forecast net income of $725-790m and diluted EPS of $4.95 to $5.40.

In the group’s previous financial year, it booked net income of $1.01bn and diluted earnings of $6.95 a share.

Tom Werner, Lamb Weston’s president and CEO, said: “We raised our earnings target for the year to reflect our performance in the quarter, as well as the current solid demand and pricing environment.

“We continue to expect the potato crop in our growing regions in North America will be in line with historical averages, and we believe the overall crop in Europe has improved compared to earlier predictions as a result of better growing conditions.”

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By GlobalData

In the opening quarter of Lamb Weston’s financial year, a three-month period that ran to 27 August, its net sales increased 48% to $1.67bn.

The figure included $375m of sales attributable to acquisitions. Lamb Weston pointed to its purchase of the remaining shares in ventures in EMEA and Argentina.

Excluding M&A, net sales grew 15%. Lamb Weston said “price/mix” was up 23%, with moves to up prices to counter higher input costs a factor.

Volumes fell 8%, which the group said “primarily” reflected decisions to stop selling “lower-priced and lower-margin” products.

To a lesser extent, inventory destocking by some customers also weighed on volumes, Lamb Weston said. The company insisted “elasticities” in response its moves to up prices “have generally been low”.

Werner added: “We delivered solid sales and earnings growth in the quarter, driven by the carryover benefit of pricing actions initiated last year as well as improved customer and product mix. Organic sales volumes were in line with expectations, and shipment trends improved as the quarter progressed.”

Income from operations more than doubled to $323.3m, helped by the higher sales and improved gross profits.

Net income was $234.8m, up 1.3% on the corresponding quarter a year earlier. Diluted EPS was $1.60, is the same as the prior-year quarter.