Lamb Weston (LW) investor relations material

Executive summary

• Delivered Q1 FY26 results exceeding expectations, with 6% volume growth and strong customer momentum, supported by the Focus to Win strategy and new product launches.

• Early execution of cost savings and operational excellence initiatives led to lower manufacturing costs and SG&A expenses.

• Restarted a previously curtailed production line in North America to meet sustained demand.

• Reaffirmed fiscal 2026 outlook, positioning for long-term value creation.

• Net income dropped 50% to $64.3 million, and diluted EPS fell 48% to $0.46, mainly due to higher taxes and lower equity earnings.

Financial highlights

• Q1 FY26 net sales were $1,659.3 million, up $5.2 million year-over-year, with a 6% volume increase offset by a 7% price/mix decline at constant currency.

• Adjusted EBITDA was $302.2 million, up 1% year-over-year; North America adjusted EBITDA declined $18 million to $260 million, while International increased $5.8 million to $57.2 million.

• Adjusted gross profit declined $14.2 million to $338.9 million, mainly due to unfavorable price/mix.

• Free cash flow was strong at $273 million, with $352 million generated from operations, up $21.8 million year-over-year.

• Adjusted diluted EPS was $0.74, down $0.04 year-over-year.

Outlook and guidance

• Fiscal 2026 outlook reaffirmed: net sales at constant currency expected between $6.35 billion and $6.55 billion; adjusted EBITDA guidance of $1.0–$1.2 billion, including current tariffs.

• Capital expenditures forecasted at ~$500 million for FY26.

• Effective tax rate expected at 26–27% for FY26, with higher rates in the first half.

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

• Expect year-over-year volume growth in both segments, with price/mix unfavorable in the first half and moderating in the second half.