By Dean Seal
Lamb Weston is scheduled to report fiscal first-quarter results on Thursday morning. Here’s what you need to know.
PROFIT: The potato-products company is expected to post a profit of $169.6 million, compared with $232 million in the same quarter a year ago, according to FactSet.
ADJUSTED EARNINGS: Stripping out one-time items, earnings are projected to be $1.08 a share, according to FactSet.
SALES: Revenue is expected to come in at $1.62 billion, up from $1.13 billion in the year-ago quarter, according to FactSet.
WHAT TO WATCH
INPUT COSTS: Like other food makers, Lamb Weston has been dealing for more than a year with inflated costs for key inputs, including raw potatoes, labor, energy, edible oils and ingredients, such as grains and starches, that are used in product coatings. Last quarter, that inflation decelerated to high single-digits from double-digits in several quarters prior. Investors will be looking for that cost inflation to keep coming down in the new fiscal year.
PRICING: Also like its food-producing peers, Lamb Weston has been raising prices for the past year to offset the higher costs. In the fiscal fourth quarter, the company said higher prices and a better mix of products sold boosted its top line by 24%. Investors will want to know how much pricing plays into the company’s sales growth this time around.
VOLUMES: Consumers have been growing tired of higher prices for everything from food to fuel and spending less as a result. In the fiscal fourth quarter, Lamb Weston’s sales volume fell 10%, which the company attributed to its exit from certain lower-priced and lower-margin business. Lamb Weston expects volumes to remain under pressure this year.
Write to Dean Seal at [email protected]
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