By Elias Schisgall

Lamb Weston Holdings said it is facing softness in key international markets, in part due to the war in Iran, that will weigh on its sales in the current quarter, even as it posted higher fiscal third-quarter revenue.

Shares were down 7.5% to $39.10 in Wednesday afternoon trading, after hitting a 52-week low of $38.64 earlier in the session. The stock is down 6.7% year to date.

Sales fell 1% in the french-fry maker's international business in the quarter ended Feb. 22 due to a surplus in the European potato market and lower restaurant traffic in certain key markets, Chief Executive Officer Mike Smith told analysts on a Wednesday call.

The war in Iran is also expected to weigh on international sales, Chief Financial Officer Bernadette Madarieta said, as sales to the Middle East comprise a high-single-digit percentage of year-to-date international volumes.

International volumes are expected to show year-over-year declines in the second half of the fiscal year, driven by challenging year-earlier comparisons, she added.

The company's overall 3% increase in sales in the third quarter was driven by higher volume in North America, Madarieta said.

That was partially offset by the decline in international sales, as well as a 7% decline in price/mix in North America, Madarieta said. Price declines are expected to moderate in the current fourth quarter, she said, helped in part by a price increase for noncontracted North American business.

Lamb Weston raised the bottom end of its guidance for the rest of the year, projecting net sales in fiscal 2026 between $6.45 billion and $6.55 billion, up from a previous range of $6.35 billion to $6.55 billion. Analysts polled by FactSet were expecting $6.53 billion.

The company recorded a third-quarter profit of $54 million, or 39 cents a share, compared with a profit of $146 million, or $1.03 a share, a year earlier.

Stripping out certain one-time items, the company reported adjusted earnings of 72 cents a share for the quarter. Analysts surveyed by FactSet were expecting 61 cents a share.

Net sales in the third quarter rose to $1.56 billion, up from $1.52 billion a year prior. Analysts were expecting $1.49 billion.

In addition to lifting the low end of its sales guidance, Lab Weston narrowed its full-year guidance for adjusted earnings before interest, taxes, depreciation, and amortization to between $1.08 billion and $1.14 billion. It had previously projected a range of $1 billion to $1.2 billion.

The updated adjusted Ebitda guidance takes into account the impacts of the conflict in the Middle East, Madarieta said.

Capital expenditures are now projected at about $400 million for the year, down from about $500 million in the company's previous guidance.

Write to Elias Schisgall at elias.schisgall@wsj.com

(END) Dow Jones Newswires

April 01, 2026 14:42 ET (18:42 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.