Lamb Weston Holdings, Inc. (LW) stock plummeted 3.48% in the current-market trading session at the price of $60.17 after reporting its fiscal first-quarter 2022 financial results. Lamb Weston supplies frozen potatoes, sweet potatoes, appetizers, and other vegetable products to restaurants and markets globally.  

LW Fiscal First Quarter 2022 Financial Results 

On 7th October 2021, LW published its fiscal first-quarter 2022 financial results and provided a fiscal 2022 outlook.  

Management Comments 

CEO of LW, Tom Werner, remarked that their fiscal first-quarter results reveal their recovery in the frozen potato sector and their shipping improvements in their core restaurant and foodservice channels. However, the intense summer heat combined with industrywide operational challenges has negatively smashed potato crops in the Pacific Northwest. High inflationary input and shipment costs, labor availability, upstream and downstream supply chain interruptions resulted in higher expenses that have pressurized their earnings during the quarter.   

Their trained team is taking additional steps that aimed to alleviate these challenges. LW is administering pricing actions to balance products inflation, restructuring shipping policies, adjusting production and crewing schedules to lessen labor volatility. Their team has concentrated on fixing these challenges to improve investments in productivity, technology, and capability to support customer growth. All these steps will take them back on track to push profitable growth and create long-term value for their stakeholders, he concluded.   

First Quarter Fiscal 2022 Financial Highlights  

LW reported a net sales increment of $984.2 million from $112.7 million, 13% higher than the prior year same quarter. Income from operations declined from $75.5 million to $60.2 million. It represents a drop of 56% compared with the previous year same quarter. Adjusted EBITDA decreased $78.4 million to $123.4 million, down 39% from the fiscal first quarter of 2021. It resulted from lower operational and equity method investment incomes. LW reported net cash of $161.8 million from operating activities. It represents a drop of $88.8 million from the same quarter of the last year. The company returned $60.4 million to shareholders during the quarter. It includes $34.4 million in cash dividends and $26.0 million from share repurchases.

LW Fiscal 2022 Outlook 

For fiscal 2022, LW expects net sales growth above its long-term target of low-to-mid single digits. The company anticipates gross profit margins to remain below pre-pandemic levels through fiscal 2022. It expects higher pressure at net income and adjusted EBITDA during fiscal 2022.