Lamb Weston Holdings, Inc. (NYSE:LW) posted first-quarter fiscal 2026 net sales of $1.66 billion, up slightly from $1.65 billion a year earlier and ahead of the $1.62 billion estimate.
Adjusted net income was $103 million, with adjusted earnings per share of 74 cents, topping the 55-cent estimate. Adjusted EBITDA increased to $302.2 million from $299.4 million.
"The Lamb Weston team delivered a strong start to the fiscal year with solid volume growth and positive customer momentum, underscoring the strength of our value proposition and our operating model," said Mike Smith, Lamb Weston president and CEO.
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"We believe our sharpened executional focus and strategic plans behind our Focus to Win strategy are beginning to deliver and position us to drive long-term growth and sustainable value for our shareholders."
Overall volume rose 6%, while price/mix declined 7% due to prior-year pricing investments, trade support, and channel mix. Gross profit fell to $342.4 million from $356.0 million, with adjusted gross profit down to $338.9 million from $353.1 million.
SG&A increased to $153.6 million from $143.9 million, while adjusted SG&A fell to $132.4 million from $156.4 million, helped by cost savings and $7.3 million in recoveries. Equity method investments produced a $0.6 million loss versus $11.3 million in earnings last year.
North America sales declined 2% to $1.08 billion, as 5% volume growth was offset by a 7% price/mix drop. Segment adjusted EBITDA slipped to $260.0 million from $278.0 million. International sales rose 4% to $574.7 million, including a $24.5 million currency benefit, while constant-currency sales were flat.
Volume climbed 6%, but price/mix fell 6%. International adjusted EBITDA improved to $57.2 million from $51.4 million, aided by higher volumes, lower potato costs, and savings, partly offset by $3.5 million in Argentina start-up costs.
Operating cash flow rose to $352.0 million from $330.2 million, driven by lower inventories. Capital spending dropped to $79.2 million from $335.6 million after major projects wrapped up.
Cash and equivalents were $98.6 million, with $1.32 billion in available credit facility liquidity. Capital returned to shareholders totaled $62.1 million, including $51.7 million in dividends and $10.4 million in repurchases.
The board declared a quarterly dividend of 37 cents per share, payable Nov. 28, 2025.
Outlook
The company reaffirmed its fiscal 2026 guidance for constant-currency sales of $6.35 billion to $6.55 billion, compared to a $6.49 billion estimate, and adjusted EBITDA of $1.0 billion to $1.2 billion.
Capital expenditures are projected to be approximately $500 million. Guidance reflects enacted tariffs but excludes the effects of future policy changes.
Results included $31.9 million in pre-tax charges tied to the Cost Savings Program, which is expected to deliver $250 million in annualized savings by fiscal 2028, with $100 million in savings and $60 million in working capital improvements anticipated by fiscal 2026.
Price Action: LW shares are trading higher by 6.99% to $59.56 at last check Tuesday.
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