Lamb Weston Holdings, Inc. reported its financial results for the thirteen weeks ended August 25, 2024, revealing a decline in net sales and profitability compared to the same period in the previous fiscal year. Net sales totaled $1,654.1 million, down $11.2 million, or 1%, from $1,665.3 million in the prior year. The decrease was attributed to a 3% decline in volume, driven by customer share losses and soft restaurant traffic, alongside a voluntary product withdrawal. However, price/mix improved by 2%, influenced by inflation-related pricing actions in North America and Europe.
Gross profit for the quarter was $356.0 million, a significant decrease of $143.5 million from $499.5 million in the prior year. This decline was impacted by higher manufacturing costs and a $39 million loss related to the product withdrawal. Adjusted EBITDA also fell to $289.9 million, down $122.9 million from $412.8 million in the same quarter of the previous year.
Net income for the quarter was $127.4 million, a decline of $107.4 million from $234.8 million in the prior year, with basic earnings per share dropping to $0.89 from $1.61. The effective tax rate increased to 28.5% from 22.9% in the previous year.
On the balance sheet, total assets increased to $7,512.5 million from $7,367.0 million as of May 26, 2024. Cash and cash equivalents rose to $120.8 million, up from $71.4 million, while total debt and financing obligations increased to $4,048.9 million from $3,842.4 million.
In terms of strategic developments, Lamb Weston announced a restructuring plan on October 1, 2024, aimed at enhancing operational efficiency and reducing costs. This plan includes the permanent closure of a manufacturing facility in Connell, Washington, and a temporary curtailment of certain production lines across North America. The restructuring is expected to incur pre-tax charges between $200 million and $250 million in fiscal 2025, with anticipated annualized savings of approximately $85 million.
The company also repurchased 1,412,852 shares of common stock for $82.0 million during the quarter, with $308 million remaining authorized for future repurchases. Despite the challenges faced, Lamb Weston remains the leading supplier of value-added frozen potato products in North America and continues to adapt its strategies to improve profitability and cash flow.
About Lamb Weston Holdings, Inc.
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