By Denny Jacob

Lamb Weston Holdings' sales grew in its latest quarter as the company secured new contracts and continues to streamline operations, a bright spot compared to prior results.

The French-fry maker on Thursday logged net income of $146 million, or $1.03 a share, for the third quarter ended Feb. 23, compared to $146.1 million, or $1.01 a share, in the prior-year period.

Stripping out certain one-time items, adjusted earnings came in at $1.10 a share. Analysts polled by FactSet expected 86 cents a share.

Sales grew to $1.52 billion compared to $1.46 billion. Analysts polled by FactSet expected $1.49 billion.

The Eagle, Idaho, company said the top-line growth benefited from growing volume as it fully replaced the combined regional, small, and retail customer volume lost in the prior due to its transition to a new enterprise resource planning system in North America. It added that it had recent customer contract wins across channels and geographic regions, though they were partially offset by soft global restaurant traffic trends.

"We expect headwinds from soft restaurant traffic to persist, and we continue to see opportunities to further streamline costs," said Chief Executive Mike Smith.

Lamb Weston maintained its outlook of sales between $6.35 billion and $6.45 billion, as well as adjusted earnings per-share between $3.05 and $3.20, for fiscal 2025.

The latest quarterly report was met positively by investors who have been concerned with soft results in prior quarters, all of which has culminated in a change at CEO, a restructuring plan and growing pressure from activist investor Jana Partners who has built a stake in the company and called for a significant board change or sale of the company .

Shares were up 5.5% to $57.10 in premarket trading. The stock is down 34% over the last year.

Write to Denny Jacob at denny.jacob@wsj.com

(END) Dow Jones Newswires

April 03, 2025 09:12 ET (13:12 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.