- Lamb Weston reported net sales increased 5% to $769 million in its 2017 third quarter, according to its earnings report.
- The company’s income grew 14% from a year earlier to $145 million.
- Lamb Weston’s foodservice segment grew 10% year-over-year to $242 million, reflecting pricing actions as well as improvement in customer and product mix.
Since breaking off from Conagra last year, Lamb Weston has posted back-to-back earning report increases. Its success has reaffirmed analysts’ projections that the spinoff could be one of the most lucrative in the past couple of years.
With a 5% rise in net sales, the company is showing no signs of struggling as a standalone company, and it appears to even be stronger. Income from operations grew 14% to $145 million despite raw potato costs being relatively flat compared to the previous year period. Lamb Weston said a favorable price and product mix largely drove the increase.
A recent Nielsen Perishables Group report showed domestic retail spending on fresh potatoes increased slightly throughout the six-month period ending in December, the first growth in a while.
Tom Werner, Lamb Weston’s president and CEO, said “price/mix improvement and modest volume gains drove both sales and product contribution margin growth” and the company expects to reach its target goals for the year.
A 20% decrease in diluted EPS was attributed to a $17.7 million non-cash gain related to the settlement of a pension plan of the Company’s Lamb-Weston/Meijer joint venture in the prior year quarter.
Lamb Weston posted another solid quarter, its second earnings report as a standalone company. The frozen potato supplier, which supplies McDonald's and Yum Brands, is popular with analysts, and unlikely to see its success thaw anytime soon.