MW More job cuts, strong demand for french fries is sending this stock to a record gain

By Tomi Kilgore

Lamb Weston's stock is leading the S&P 500's gainers after an earnings beat and a cost-cutting plan that includes laying off another 4% of the workforce

Shares of Lamb Weston Holdings Inc. rocketed toward a record gain Wednesday, after the frozen-potato company reported fiscal fourth-quarter profit and sales that beat expectations by wide margins, amid strong demand for french fries around the world.

The company also announced a restructuring, aimed at saving $250 million a year, that will include layoffs of about 4% of the workforce, or 404 people based on the company's headcount of 10,100 as of July 17. That follows a 4% workforce reduction announced in October 2024.

Lamb Weston's stock (LW) shot up 16.1% in afternoon trading, enough to pace the S&P 500 index's SPX gainers. It is also on track for the biggest one-day gain since going public in November 2016. The current record gain is 15.4%, achieved on March 24, 2020.

The rally comes just two days after the stock closed at $48.04 - its lowest price since March 23, 2020 - amid concerns over cautionary spending by consumers and falling prices.

On Wednesday's post-earnings call with analysts, Chief Executive Mike Smith said "global demand for french fries remains strong," with the most growth in emerging markets, but he noted that how they are purchased and prepared is evolving.

He said the company has seen evidence of growth in home delivery of food and an expansion of fast-food restaurant concepts, while the increased use of air fryers is changing how fries are cooked at home.

In the U.S., while traffic at fast-food restaurants declined, french fry sales were up 1% during the fiscal fourth quarter to May 25, while serving sizes also increased 1%, Chief Financial Officer Bernadette Madarieta said, according to a FactSet transcript. The growth was helped by a 4% decline in price amid an increasingly competitive environment.

"In fiscal 2026, we expect our category to continue to be in high demand, with customers and consumers prioritizing french fries as a menu and an at-home item," Madarieta said.

For 2026, the company expects net sales of $6.35 billion to $6.55 billion, compared with prior-year revenue of $6.45 billion and the average analyst estimate compiled by FactSet of $6.41 billion.

For the fiscal fourth quarter, the company reported net sales growth of 4% from the same period a year ago to $1.68 billion, above the FactSet consensus of $1.59 billion.

North America sales were down 1% to $1.1 billion, as a price and mix decline of 5% offset a 4% increase in volume. International sales jumped 15% to $572.7 million, as volume rose 16% and price and mix slipped 1%.

Net income fell 7.5% to $119.9 million, while adjusted earnings per share, which excludes nonrecurring items, rose to 87 cents from 78 cents to beat expectations of 63 cents.

Lamb Weston's stock has lost 14.6% in 2025, while the Consumer Staples Select Sector SPDR ETF XLP has gained 3.7% and the S&P 500 has advanced 8%.

-Tomi Kilgore

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July 23, 2025 15:45 ET (19:45 GMT)

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