Lamb Weston Holdings Inc. reported fiscal second‑quarter 2026 results on December 19, 2025, showing adjusted earnings per share of $0.69, a 5% decline from the $0.73 reported in Q2 FY2025. The drop reflects a 5% year‑over‑year decline in adjusted diluted EPS, driven by a 1% increase in net sales offset by an 8% price/mix erosion that compressed margins.
Net sales rose to $1.618 billion, up 1% year‑over‑year, largely due to volume gains in North America and Asia. However, adjusted gross profit fell to $327.9 million, a decline of $15.6 million from the prior year, as the 8% price/mix decline outweighed the volume upside. The company’s adjusted EBITDA reached $285.7 million, matching the prior‑year figure, indicating that cost‑control initiatives have largely offset the pricing pressure.
Lamb Weston reaffirmed its full‑year 2026 guidance, maintaining a sales range of $6.35 billion to $6.55 billion and an adjusted EBITDA range of $1.00 billion to $1.20 billion. The guidance midpoint of $6.45 billion is slightly below the analyst consensus of $6.52 billion, signaling management’s cautious outlook amid ongoing pricing headwinds and international segment weakness.
Segment analysis shows the North America unit delivered a 3% increase in adjusted EBITDA, driven by strong demand from fast‑food customers and a favorable product mix. In contrast, the International segment reported a 4% decline in adjusted EBITDA, reflecting competitive pricing pressures in Europe and Latin America and a carryover impact from fiscal 2025 pricing strategies. These regional disparities highlight the company’s uneven performance across markets.
CEO Mike Smith emphasized that “turnarounds are not linear,” noting that while volume gains and cost‑saving initiatives are progressing, the company faces persistent pricing challenges, especially in international markets. He also highlighted the company’s commitment to achieving the $100 million cost‑savings target for fiscal 2026 and the 3% dividend increase to $0.38 per share, underscoring confidence in long‑term cash flow generation.
Market reaction to the results was muted, with analysts pointing to the 8% price/mix decline and the guidance midpoint falling short of consensus as key concerns. Despite the EPS and revenue beats, investors remained cautious about the company’s ability to reverse margin compression and the continued weakness in the international segment.
The earnings beat of $0.02 per share over the $0.67 consensus and a $0.03 billion revenue beat over the $1.59 billion estimate demonstrate that operational execution has delivered value, but the underlying pricing pressures and segment disparities suggest that the company’s path to margin recovery will require sustained cost discipline and strategic pricing adjustments.
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