Lamb Weston Q1 2027 earnings: profit tops estimates, full-year outlook raised
Lamb Weston's Q1 2027 adjusted profit beat estimates on North America volume gains, though restructuring charges pulled down reported earnings; full-year outlook was raised.
| Q1 2027 | Reported | Expected | Surprise |
|---|---|---|---|
| EPS | $0.75 | $0.61 | +23.8% |
| Revenue | $1.67B | $1.70B | -2.0% |
Key takeaways
- Adjusted profit came in well above what analysts had expected, and net sales edged up slightly from a year earlier, as the maker of frozen fries and potato products got its new fiscal year off to a stronger-than-planned start.
- The gap between the much smaller official (GAAP) profit figure and the higher adjusted figure mainly reflects one-time restructuring costs — about $34 million this quarter — tied to closing older plants, including one in Connell, Washington and one in the Netherlands, as the company streamlines its factory network.
- CEO Mike Smith said the company is “off to a solid start to the year, delivering first quarter net sales and profit above our expectations,” crediting strong customer relationships in North America for driving higher sales volumes.
- North America, the company’s largest market, was the main engine of growth this quarter, benefiting from both rising volumes and ongoing cost-cutting efforts.
- The international business performed roughly as expected; its European operations remain under pressure from a tough market, though profitability there improved from the prior quarter as the drag from last year’s expensive potato crop faded.
- Trailing-year profitability remains thin and still below year-ago levels — gross margin sits near 21% and net profit margin near 4%, meaning the company keeps only a few cents of every sales dollar after all costs — underscoring that the turnaround from cost-cutting and restructuring is still in progress even as this quarter beat expectations.
- Based on the stronger-than-expected start, Lamb Weston raised its full-year adjusted earnings (EBITDA) outlook for fiscal 2027 to a range of $1.125 billion to $1.215 billion.
- The company expects to book another $30 million to $50 million in restructuring-related charges over the rest of fiscal 2027 as it continues closing and demolishing underused facilities.
Q1 2027 in context
| Metric | Aug 2026 | Aug 2025 | Change |
|---|---|---|---|
| Revenue | $1.7B | $1.7B | +0.7% |
| Net income | $29M | $64M | -54.7% |
| Free cash flow | $146M | $274M | -46.8% |
| Diluted EPS | $0.21 | $0.46 | -54.3% |
| Gross margin | 16.0% | 20.6% | -4.7 pts |
| Operating margin | 4.9% | 9.4% | -4.5 pts |
| Net margin | 1.7% | 3.9% | -2.1 pts |
Figures for the quarter ended Aug 2026 and the quarter ended Aug 2025, as reported to the SEC.
How the stock took it
Lamb Weston Holdings Inc closed at $44.57 on Oct 5, 2026, the last session before the report, and at $48.09 on Oct 7, 2026, the first session after it — +7.9% across the report.
Closes from the market's daily record. Each figure spans the report date — from the last session that closed before it to the first that closed after — because a company may report before the open or after the close.
Fundamentals
| Metric | Value | Period |
|---|---|---|
| Gross margin | 20.7% | Trailing 12 months |
| Operating margin | 8.9% | Trailing 12 months |
| Net profit margin | 4.4% | Trailing 12 months |
| Pretax margin | 6.2% | Trailing 12 months |
| EPS | $2.09 | Trailing 12 months |
| Revenue growth (YoY) | 2.5% | Trailing 12 months |
| EPS growth (YoY) | -16.6% | Trailing 12 months |
| Return on equity | 16.1% | Trailing 12 months |
Sources: company report · earnings call