Lamb Weston (LW) Q4 2024 earnings summary

Executive summary

• Q4 and FY2024 results were below expectations due to executional challenges, soft global demand, market share losses, and a voluntary product withdrawal, with higher-margin segments particularly affected.

• Fiscal Q4 2024 net sales declined 5% year-over-year to $1.61B, with net income down 74% to $130M and diluted EPS down 74% to $0.89.

• Full year 2024 net sales rose 21% to $6.47B, driven by acquisitions, but net income fell 28% to $726M and diluted EPS dropped 28% to $4.98.

• Leadership is focused on regaining lost share, improving execution, and driving long-term growth through cost reduction and operational adjustments.

• Adjusted Q4 results showed a 26% decline in income from operations and a 40% drop in adjusted net income.

Financial highlights

• Q4 sales declined $83 million (5%) to $1.61 billion; volume down 8%, price/mix up 3%.

• Adjusted EBITDA for Q4 was $283 million, down 15% YoY and $80 million below Q4 target; full year adjusted EBITDA rose 13% to $1.42B.

• Q4 adjusted net income was $114M, down 40% year-over-year; full year adjusted net income was $740M, up 6%.

• Net debt leverage ratio at 2.7x Adjusted EBITDA; net debt declined by $40 million to $3.75 billion.

• $800 million cash from operations for the year, up $37 million YoY; capex for FY24 was $990–$992 million, up $255–$256 million YoY.

Outlook and guidance

• FY2025 sales targeted at $6.6–$6.8 billion (2–5% growth), driven mainly by volume.

• Adjusted EBITDA guidance: $1.38–$1.48 billion; diluted EPS: $4.35–$4.85; net income: $630M–$705M.

• H1 FY2025 volume expected to decline due to share losses and soft restaurant traffic; H2 to see improvement as share is regained and ERP/product withdrawal impacts subside.

• Capex for FY2025 targeted at ~$850 million, mainly for capacity expansion and IT upgrades, with a notable decrease expected in FY2026.

• Price/mix expected to be flat or negative in North America, with targeted price investments to support volume.