Potato processing giant Lamb Weston Holdings (LW) posted its third-quarter 2019 earnings before the opening bell on Tuesday, April 2.
Net sales for the quarter rose by 7% to $927 million, with income from operations jumping 15% to $194 million. On an adjusted basis, operations income rose 13%.
Earnings fell 10% to $0.95 per diluted share on the absence of a 16-cent-per-share benefit from the US tax reform a year ago.
In the quarter, Lamb Weston returned $36 million of cash to stockholders in dividends and share repurchases.
Lamb Weston also updated the fiscal-year outlook, as it now expects net sales rise in high single digits, up from a previous estimate of mid-to-high single digits. Adjusted EBITDA including unconsolidated joint ventures is now expected to be $895-905 million.
“Our base business in North America and Asia continued to drive solid sales and earnings growth in the third quarter, more than offsetting softer results in Europe that are being affected by a historically poor potato crop,” said CEO Tom Werner.
Net sales for the Global segment — comprising 100 North American restaurant chain customers as well as the company’s international business — jumped 11% to $498.2 million. Volume rose 9%, on growth in sales to strategic customers in the US and key international markets, as well as the benefit of limited time product offerings. Price/mix improved 2%.
“Strong execution by our commercial teams drove an overall good balance of price/mix improvement and volume growth, while our supply chain team generated operating efficiencies and cost savings to expand gross margins. In addition, we continued to make good progress on our initiatives to invest in production capacity, as well as operating, sales and product innovation capabilities that we believe will support sustainable, profitable growth over the long term. With our solid third-quarter results, operating momentum and favorable trends in global demand, we have again raised our annual outlook for sales growth and EBITDA,” the CEO added.
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