The french-fry maker sold more volume at lower average prices. Adjusted earnings of 75 cents a share topped the 59-cent forecast, and the stock rose 9.7%, while its overseas business and reported profit went the other way.
Business · FinancialMarkets.com · October 6, 2026 · Tickers: LW, MCD, CAG, POST
Lamb Weston delivered the two things investors reward most, a beat and a raise. The parts of the report that explain how it got there were less flattering.
For its fiscal first quarter, the 13 weeks ended Aug. 30, Lamb Weston reported net sales of $1.670 billion, up 0.7% from a year earlier and above the roughly $1.655 billion analysts expected. Adjusted earnings came to 75 cents a share, against expectations of 59 cents.
The stock rose 9.7% by early afternoon.
Volume, price and mix
The modest sales increase hides two forces pulling against each other. Volume rose 2.2%. Price and mix fell 1.8%. Currency added 0.3%. Lamb Weston sold more product, and the average price it realized fell, whether from lower list prices, a shift toward cheaper products or both.
Earnings below the adjusted line
Reported profit tells a different story from the adjusted figure. Diluted earnings per share under generally accepted accounting principles fell to 21 cents from 46 cents a year earlier, a 54% decline. Adjusted earnings before interest, taxes, depreciation and amortization fell 5%.
The split by region is sharper. Adjusted EBITDA in North America rose 11%. In the International segment it fell 54%. The company attributed the overall decline in adjusted EBITDA to lower price and mix and to higher cost of sales and overhead, with higher manufacturing cost per pound concentrated mostly in International, particularly Europe, the Middle East and Africa.
The new outlook
Lamb Weston raised every line of its fiscal 2027 outlook. It now expects net sales to rise by a low-single-digit percentage, up from a previous range of flat to 1%. Adjusted EBITDA is now forecast at $1.125 billion to $1.215 billion, from $1.10 billion to $1.20 billion, and adjusted earnings at $3.05 to $3.35 a share, from $2.95 to $3.25. Capital spending is unchanged at $380 million to $410 million.
The midpoint of the earnings range rose 10 cents. The first quarter beat analysts' estimate by 16 cents. A raise smaller than the beat suggests management may not be assuming the first quarter's outperformance repeats in full over the remaining three quarters.
The two sides
One side argues that North America, the company's largest market, is growing earnings at a double-digit rate, volumes are rising and management has enough confidence to raise every line of guidance after one quarter.
The other side argues that falling prices, a halving of international earnings and a reported profit cut by more than half show a business still under margin pressure, with the adjusted figures carrying the headline.
What would settle it
Price and mix in the second quarter will show whether the decline in pricing is stabilizing. International EBITDA will show whether the European cost problem is temporary. If both improve while volume keeps growing, the raised outlook would rest on more than North America alone.