Lamb Weston (LW) Q2 2026 earnings summary

Executive summary

• Focus to Win strategy and cost savings drove customer partnerships, operational improvements, and share gains, with volume up 8% in Q2 and 7% for the first half, especially in North America and Asia.

• Net sales for Q2 2026 rose 1% year-over-year to $1,618.1 million, with volume gains offset by an 8% decline in price/mix; foreign currency provided a $24.4 million benefit.

• Cost savings initiatives improved manufacturing costs and reduced SG&A, supporting margin resilience.

• Board authorized a 3% increase in the quarterly dividend, continuing annual increases since IPO.

• Restarted previously curtailed North American production lines to meet higher demand.

Financial highlights

• Q2 net sales: $1,618.1M (up $17.2M YoY); volume up 8%, price/mix down 8%; gross profit: $324.3M (up $46.5M YoY); adjusted EBITDA: $285.7M (down $8.5M YoY); net income: $62.1M (vs. $(36.1)M YoY).

• Free cash flow for 1H FY26 was $375M; net cash from operations was $530.4M, up $101.1M YoY.

• Capital expenditures for 1H FY26 were $155.7M, down $330.7M from prior year.

• North America Adjusted EBITDA rose $18.6M to $287.8M; International Adjusted EBITDA fell $21.4M to $27.2M.

• Q2 gross margin: 20.1% (up from 17.4% YoY); effective tax rate: 36.7% (vs. (59.0)% YoY).

Outlook and guidance

• Fiscal 2026 net sales guidance reaffirmed at $6.35–$6.55 billion; adjusted EBITDA expected at $1.00–$1.20 billion, with expectations to finish near the midpoint.

• Capital expenditures for fiscal 2026 projected at approximately $500 million; interest expense ~$190M; D&A ~$390M; tax rate 28–29%.

• Guidance includes current tariffs but excludes potential future trade policy changes.

• North America volumes expected to grow at or above first-half rates; International volumes to be flat year-over-year in the second half.

• Price/mix headwinds to persist but moderate in the second half; Adjusted Gross Margin expected flat to down versus first half's 20.4%.