# Lamb Weston (LW) Q1 2026 Financial Results Summary
**Release Date**: September 30, 2025
Lamb Weston Holdings, Inc. (NYSE: LW) reported its financial results for the first quarter of fiscal 2026, reaffirming its full-year targets. Below is a summary of key financial metrics and highlights from the report, comparing them to the same quarter of the previous year.
## Summary of First Quarter FY 2026 Results
– **Net Sales**: $1,659.3 million
– Year-over-Year Change: 0% (including a favorable foreign currency impact of 1.6%)
– **Income from Operations**: $156.5 million
– Year-over-Year Change: Decrease of 26%
– **Net Income**: $64.3 million
– Year-over-Year Change: Decrease of 50%
– **Diluted EPS**: $0.46
– Year-over-Year Change: Decrease of 48%
– **Adjusted Income from Operations**: $206.5 million
– Year-over-Year Change: Increase of 5%
– **Adjusted Net Income**: $103.0 million
– Year-over-Year Change: Decrease of 9%
– **Adjusted Diluted EPS**: $0.74
– Year-over-Year Change: Decrease of 5%
– **Adjusted EBITDA**: $302.2 million
– Year-over-Year Change: Increase of 1%
– **Capital Returned to Shareholders**: $62.1 million
– Breakdown:
– Cash Dividends: $51.7 million
– Share Repurchase: $10.4 million (187,259 shares at an average price of $55.34)
## Q1 2026 Detailed Commentary
### **Net Sales Analysis**
– Net sales reflected a slight increase of $5.2 million over the prior year, heavily influenced by foreign currency impacts.
– Net sales at **constant currency** showed a **decline of 1%**, balancing a **6% increase in volume** against a **7% decrease in price/mix**.
### **Gross Profit Overview**
– Gross Profit declined by $13.6 million to $342.4 million due to the negative effects of price/mix, slightly mitigated by cost savings initiatives and higher sales volumes.
### **Operating Expenses**
– **Selling, General, and Administrative (SG&A) Expenses**: Increased by $9.7 million versus the prior year to $153.6 million.
– Adjusted SG&A declined by $24.0 million to $132.4 million, benefiting from ongoing cost-savings initiatives.
### **Net Income Metrics**
– Net Income dropped by $63.1 million, reflecting higher tax rates and lower Equity Method Investment Earnings.
– Effective tax rate significantly increased to **42.7%** from **28.5%** year-over-year.
### **Segment Analysis**
– **North America Segment**:
– Net sales: Decreased by 2% to $1,084.6 million.
– Volume growth of 5% attributed to customer wins.
– Adjusted EBITDA: Decreased by 6% to $260.0 million.
– **International Segment**:
– Net sales: Increased by 4% to $574.7 million, with a flat performance at constant currency.
– Volume up by 6%, particularly driven by growth in Asia.
– Adjusted EBITDA: Increased by 11% to $57.2 million.
### **Equity Method Investment**
– Reporting a loss of $0.6 million compared to earnings of $11.3 million in the same quarter last year, primarily due to lower net sales and unfavorable product mix.
### **Cash Flow and Capital Expenditures**
– Operating cash flow increased by $21.8 million, reaching $352.0 million due to improved working capital, especially in North America.
– Capital expenditures significantly decreased to $79.2 million from $335.6 million due to the completion of previous investments.
### **Liquidity and Capital Return**
– The company had $98.6 million in cash and cash equivalents and $1,318.4 million in available liquidity under its revolving credit facility.
– **Quarterly Dividend Declared**: $0.37 per share, payable on November 28, 2025.
### **Fiscal 2026 Outlook**
– Lamb Weston maintains its fiscal 2026 targets:
– Net sales at constant currency projected between $6.35 billion and $6.55 billion.
– Adjusted EBITDA target range of $1.00 billion to $1.20 billion.
– Capital expenditures estimated at approximately $500 million.
### **Strategic Initiatives**
– The “Focus to Win” strategy aims to enhance execution and drive profitable growth through targeted investments and innovation.
This report provides a comprehensive overview of Lamb Weston’s Q1 2026 financial performance, showcasing challenges in net income while maintaining growth in certain operational areas and reiterating confidence in future targets.
Here are the extracted tables from the press release:
### Consolidated Statements of Earnings
*(unaudited, in millions, except per share amounts)*
| Thirteen Weeks Ended | |||
|---|---|---|---|
| August 24, 2025 | August 25, 2024 | ||
| Net sales (4) | $ 1,659.3 | $ 1,654.1 | |
| Cost of sales (1) (2) (4) | 1,316.9 | 1,298.1 | |
| Gross profit | 342.4 | 356.0 | |
| Selling, general and administrative expenses (3) | 153.6 | 143.9 | |
| Restructuring expense (1) | 32.3 | — | |
| Income from operations | 156.5 | 212.1 | |
| Interest expense, net | 43.7 | 45.2 | |
| Income before income taxes and equity method earnings | 112.8 | 166.9 | |
| Income tax expense | 47.9 | 50.8 | |
| Equity method investment earnings (loss) | -0.6 | 11.3 | |
| Net income (1) (4) | $ 64.3 | $ 127.4 | |
| Earnings per share: | |||
| Basic | $ 0.46 | $ 0.89 | |
| Diluted | $ 0.46 | $ 0.88 | |
| Dividends declared per common share | $ 0.37 | $ 0.36 | |
| Weighted average common shares outstanding: | |||
| Basic | 139.5 | 143.6 | |
| Diluted | 139.8 | 144.2 |
—
### Consolidated Balance Sheets
*(unaudited, in millions, except share data)*
| August 24, 2025 | May 25, 2025 | |
|---|---|---|
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 98.6 | $ 70.7 |
| Receivables, net of allowances of $0.9 | 772.7 | 781.6 |
| Inventories | 906.8 | 1,035.4 |
| Prepaid expenses and other current assets | 95.2 | 145.0 |
| Total current assets | 1,873.3 | 2,032.7 |
| Property, plant and equipment, net | 3,686.7 | 3,687.9 |
| Operating lease assets | 117.7 | 113.2 |
| Goodwill | 1,113.7 | 1,090.2 |
| Intangible assets, net | 114.5 | 114.0 |
| Other assets | 330.8 | 354.6 |
| Total assets | $ 7,236.7 | $ 7,392.6 |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
| Current liabilities: | ||
| Short-term borrowings | $ 215.4 | $ 370.8 |
| Current portion of long-term debt and financing obligations | 81.8 | 77.8 |
| Accounts payable | 544.9 | 616.4 |
| Accrued liabilities | 415.9 | 411.0 |
| Total current liabilities | 1,258.0 | 1,476.0 |
| Long-term liabilities: | ||
| Long-term debt and financing obligations, excluding current portion | 3,670.9 | 3,682.8 |
| Deferred income taxes | 264.0 | 253.5 |
| Other noncurrent liabilities | 254.0 | 242.6 |
| Total long-term liabilities | 4,188.9 | 4,178.9 |
| Commitments and contingencies | ||
| Stockholders’ equity: | ||
| Common stock of $1.00 par value, 600,000,000 shares authorized; 151,832,842 and 151,390,267 shares issued | 151.8 | 151.4 |
| Treasury stock, at cost, 12,497,431 and 12,152,507 common shares | -856.7 | -838.0 |
| Additional distributed capital | -468.2 | -479.1 |
| Retained earnings | 2,861.8 | 2,848.9 |
| Accumulated other comprehensive income | 101.1 | 54.5 |
| Total stockholders’ equity | 1,789.8 | 1,737.7 |
| Total liabilities and stockholders’ equity | $ 7,236.7 | $ 7,392.6 |
