Lamb Weston Holdings (NYSE:LW) stock gained sharply on Wednesday after posting better than expected earnings results and reaffirming its full year outlook.
For its fiscal first quarter, the potato product provider posted $0.75 in adjusted earnings per share alongside $1.13B in revenue. Analysts had anticipated $0.50 and $1.12B, respectively. Additionally, the company noted it was able to promote gross margin improvement despite “wide operational challenges, including labor and commodities shortages, resulting from volatility in the broader supply chain” that hit the metric.
“We drove strong sales, earnings growth, and gross margin expansion in the quarter by executing pricing actions across each of our business segments and generating manufacturing cost-savings to counter inflation,” CEO Tom Werner explained. “While volume declined as a result of softer restaurant traffic trends and supply chain constraints impacting production run-rates in our plants, we continued to make progress in improving customer service levels.”
He added that the company remains on track to hit its fiscal 2023 targets as its expansion into Argentina and investments in China stand to pay dividends in the long term. Additionally, Werner touted the “high quality” of current potato crops.
Management reaffirmed its net sales outlook of $4.7B to $4.8B, in line with the analyst consensus, and adjusted diluted EPS of $2.45 to $2.85 as compared to a consensus of $2.80.
Shares of Lamb Weston holdings (LW) rose 3.33% shortly after Wednesday’s market open.
Dig into the details of the results.