Lamb Weston Holdings has raised its full-year net sales and profit forecasts, banking on higher prices for its ready-to-cook frozen potato appetisers and easing cost pressures.
The Idaho-based company's overall average selling prices rose 23% while volumes declined 8%, mostly due to the company exiting some lower-priced and lower-margin businesses and destocking by retailers mainly in the Asia-Pacific region.
“We delivered solid sales and earnings growth in the quarter, driven by the carryover benefit of pricing actions initiated last year as well as improved customer and product mix,” said Tom Werner, president and CEO of Lamb Weston.
“Organic sales volumes were in line with expectations, and shipment trends improved as the quarter progressed.”
The company said it expects full-year 2024 net sales between $6.8 billion and $7.0 billion, compared to the previous forecast of $6.7 billion to $6.9 billion.
The strong forecast mirrors comments from packaged food peer Conagra Brands, which also topped first-quarter profit estimates on the back of price increases.
Lamb Weston expects earnings per share to be between $5.47 and $5.92 for the full-year 2024, compared with its previous forecast of $4.95 to $5.40.
Excluding items, the frozen potato products maker earned $1.63 per share, beating the average analyst estimate of $1.08 per share.
Werner added, “We raised our earnings target for the year to reflect our performance in the quarter, as well as the current solid demand and pricing environment.
“We continue to expect the potato crop in our growing regions in North America will be in line with historical averages, and we believe the overall crop in Europe has improved compared to earlier predictions as a result of better growing conditions.”
News by Reuters, additional reporting by ESM.