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Lamb Weston Experiences Unexpected Loss and Leadership Change

Lamb Weston, a prominent producer of frozen potato products, announced a leadership transition and an unexpected financial loss on Thursday. The Idaho-based company reported a second-quarter deficit of $36.1 million, equating to a loss of $0.25 per share. This outcome was considerably below analysts’ predictions, which had expected a profit of $88.0 million, or $0.61 per share. As a result, shares of Lamb Weston saw a steep decline of nearly 20% in premarket trading.

The company’s revenue also fell short of expectations, totaling $1.60 billion. This financial report has raised concerns among investors about Lamb Weston’s performance in a competitive market.

Leadership Transition at Lamb Weston

In conjunction with these financial results, Lamb Weston announced a significant change in its executive leadership. Michael J. Smith, currently serving as the Chief Operating Officer (COO), will assume the role of Chief Executive Officer (CEO) effective January 3. He replaces Tom Werner, who will remain in an advisory capacity until August 31, 2025, to facilitate a smooth transition.

Lamb Weston Adjusts Fiscal Outlook for 2025

Amid these developments, Lamb Weston has revised its fiscal 2025 projections, now estimating sales between $6.35 billion and $6.45 billion. The expectations for earnings per share have also been lowered, now forecasted to be in the range of $2.30 to $2.45, with adjusted earnings between $3.05 and $3.20. Previously, the company had anticipated revenues between $6.6 billion and $6.8 billion, with earnings per share estimates significantly higher than the latest projections.

Tom Werner highlighted the challenges facing the industry in his remarks, indicating that the company expects difficult market conditions to persist throughout the remainder of fiscal 2025 and into 2026. This outlook is influenced by an increasing rate of production capacity and a downward slide in global demand for frozen potato products, particularly outside of North America, until market dynamics improve.

As of the latest reporting, Lamb Weston’s stock has decreased nearly 28% year-to-date, underscoring the hurdles the company faces moving forward.

UPDATE—This article has been revised to include the new CEO appointment and recent stock performance details.

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