Lamb Weston Raises FY2027 Outlook as North American Fry Volumes Grow for a Seventh Straight Quarter
Lamb Weston Holdings reported first-quarter fiscal 2027 results above its own expectations and raised its full-year outlook for net sales, Adjusted EBITDA and Adjusted Diluted EPS, the company announced on October 8, 2026. The updated Adjusted EBITDA target of USD 1.125–1.215 billion compares with the previous range of USD 1.10–1.20 billion, while the Adjusted Diluted EPS outlook was lifted from USD 2.95–3.25 to USD 3.05–3.35. Net sales are now expected to grow from fiscal 2026's 52-week-adjusted base of USD 6.485 billion.
Consolidated first-quarter net sales came in at USD 1.67 billion, up 1% year-on-year, as a 2% increase in sales volume and a small favourable currency effect outweighed a 2% decline in price/mix. Reported net income fell to USD 29 million from USD 64 million a year earlier, while Adjusted EBITDA declined 5% to USD 286 million. Adjusted Diluted EPS edged up to USD 0.75 from USD 0.74.
The divergence between segments remains the central story. North America delivered net sales of USD 1.141 billion, up 5%, with volumes growing 7% — the seventh consecutive quarter of volume growth — driven by stronger demand from existing customers and new customer wins. Segment Adjusted EBITDA rose 11% to USD 287 million, helped by cost-saving initiatives and USD 5 million in tariff refunds. The International segment, by contrast, saw net sales fall 8% to USD 529 million and Segment Adjusted EBITDA drop 54% to USD 27 million, which the company attributed mainly to weaker European volumes, higher manufacturing costs per pound, factory underutilization and the carry-in of expensive prior-crop potatoes — a direct consequence of the inflated North-West European potato prices of the 2024/25 season.
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Lamb Weston is responding with structural measures. The company ended production at its Broekhuizenvorst facility in the Netherlands and is transitioning customer fulfilment to other sites in its network — a notable footprint decision in Europe's core potato-processing region. Capacity optimisation initiatives launched over a year ago in North America have lifted utilisation by roughly 10 percentage points, and the company now expects to exceed the savings originally targeted under its cost savings programme. "We are off to a solid start to the year," said President and CEO Mike Smith, pointing to North American momentum while acknowledging the difficult EMEA environment.
Cash generation remained solid: USD 235 million from operating activities, with USD 52 million returned to shareholders via dividends and a quarterly dividend of USD 0.38 per share declared for payment on December 4, 2026. Capital expenditure guidance is unchanged at USD 380–410 million in estimated cash outflows. The company will detail its long-term "Focus to Win" roadmap at an Investor Day in early calendar 2027.
For the potato supply chain, the quarter confirms two parallel realities: North American fry demand continues to expand despite foodservice headwinds, while Europe's processors are still working through the cost overhang of last season's expensive raw material — with plant closures now part of the adjustment.
