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Lamb Weston raises its 2027 profit forecast to $3.05-$3.35 a share after beating its own guidance

Lamb Weston raised the top of its fiscal 2027 adjusted earnings outlook to $3.35 a share after a 75-cent quarter beat the 59 cents analysts expected. North America drove the quarter while the international segment's profit fell.

The Investor · Invest desk

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Illustration accompanying Lamb Weston raises its 2027 profit forecast to $3.05-$3.35 a share after beating its own guidance
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What happened

  • North America segment sales rose 5.2% to $1.14 billion, with volume up 7% for a seventh straight quarter as Lamb Weston won new accounts and sold more to existing ones.
  • International segment adjusted EBITDA dropped 54% to $26.5 million, hit by potato costs carried over from last year, underused factories and inflation across Europe.
  • Total net sales edged up 0.7% to $1.67 billion as a 2% volume gain was partly offset by a 2% price/mix decline.
  • The board declared a $0.38 quarterly dividend, payable Dec. 4, 2026, to shareholders of record Nov. 6.

Why it matters

  • What it limits constraint The full-year raise now depends on North America holding up alone, because the international segment is shrinking group earnings until European demand and factory use recover.
  • Who has to decide decision Cash from the beat is going to debt reduction ahead of buybacks. A stock down about 30% on the year gets no buyback from the company.
  • What doesn't add up contradiction Seeking Alpha still rates the shares a hold with about 5% upside to a $50 target. The operating beat has not moved its fair-value call.

The $5 million of tariff refunds that helped North America is the smallest moving part in the quarter. Against segment adjusted EBITDA of $287.3 million it is about 1.7% [11][23]. The real driver was volume growth. Seeking Alpha attributes it to resilient restaurant traffic and client wins [10][5].

The beat on adjusted earnings was wide. Adjusted profit of 75 cents landed 16 cents, about 27%, above the 59 cents analysts polled by the Wall Street Journal expected [7][8][21]. The reported figure went the other way. GAAP net income fell to $29.1 million from $64.3 million a year earlier, 21 cents against 46 cents [6]. That leaves the adjusted number 54 cents above the reported one, and one-time items make up the gap [22].

Next to that beat, the guidance raise looks small. The top of the adjusted EPS range moved to $3.35 from $3.25 and the bottom to $3.05 from $2.95, lifting the midpoint 10 cents to $3.20 [13][24]. The EBITDA range rose to between $1.125 billion and $1.215 billion from $1.10 billion to $1.20 billion [14]. On a quarter that beat its own guidance by 16 cents, a 10-cent full-year lift means most of the beat is banked against a year the company still expects to be hard [21][24].

Mike Smith, the chief executive, said the company continues 'to experience unexpected inflationary pressure across key input costs and freight expense' [12]. The raised margin forecast is built on cost savings [11][14]. For the guide to hold, that inflation has to stay contained.

International sales fell 8% to $528.9 million, and the segment now earns about a tenth of what North America does [2][20]. The full-year raise is a North America result, and the overseas business is subtracting from it. The company returned $52 million in dividends in the quarter and, Seeking Alpha says, is putting debt reduction ahead of buybacks [16][4].

Either the North America volume run holds and cost savings keep outrunning inflation, and the midpoint drifts toward the top of the range. Or Europe stabilizes and international stops subtracting. The company is not forecasting that [15]. Or the costs Smith calls unexpected keep arriving, and the savings get spent defending margin instead of lifting it [12]. The first looks most likely on the volume trend [10], and a renewed international decline is what would prove it wrong [3].

What to watch

  • Whether North America's volume growth extends to an eighth straight quarter or new-account wins slow.
  • Whether European demand and factory utilization recover enough to stop international EBITDA falling.
  • Whether the board shifts cash toward buybacks as leverage approaches the 2.5x target set for 2028.

Information, not investment advice. This story is general information about companies and markets, drawn from cited reporting. It is not a recommendation to buy, sell or hold any security; check the cited sources before acting.

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  1. [1]

    Lamb Weston reported first-quarter fiscal 2027 results on Tuesday that exceeded its own guidance, prompting it to raise its full-year sales and profit forecasts.

    Reported SupportedView cited source
  2. [2]

    International segment net sales fell 8% to $528.9 million as volume dropped 6% and price/mix declined 2%.

    Reported SupportedView cited source
  3. [3]

    International segment adjusted EBITDA fell 54% to $26.5 million, hurt by lower volumes, higher potato costs carried over from the prior year, factory underutilization and inflation, particularly across Europe.

    Reported SupportedView cited source
  4. [4]

    Seeking Alpha said Lamb Weston is prioritizing debt reduction over buybacks, with a 3.4% dividend yield supported by cash flow and leverage targeted at 2.5x by 2028.

    Reported Supported Source: Seeking Alpha analystView cited source
  5. [5]

    Seeking Alpha attributed US segment strength to resilient restaurant traffic and client wins, offsetting international weakness and mix pressure from private-label growth.

    Reported Supported Source: Seeking Alpha analystView cited source
  6. [6]

    Net income for the quarter ended Aug. 30 was $29.1 million, or 21 cents a share, down from $64.3 million, or 46 cents a share, a year earlier.

    Reported SupportedView cited source
  7. [7]

    Excluding one-time items, Lamb Weston posted adjusted earnings of 75 cents a share for the quarter.

    Reported SupportedView cited source
  8. [8]

    Analysts had expected adjusted earnings of 59 cents a share, according to the Wall Street Journal.

    Reported Supported Source: The Wall Street Journal, cited by qz.comView cited source
  9. [9]

    Net sales rose 0.7% to $1.67 billion, driven by a 2% increase in volume that was partially offset by a 2% decline in price/mix.

    Reported SupportedView cited source
  10. [10]

    North America segment net sales rose 5.2% to $1.14 billion, with segment volume up 7%, its seventh straight quarter of growth, as the company attracted new accounts and deepened sales with existing ones.

    Reported SupportedView cited source
  11. [11]

    North America segment adjusted EBITDA rose 11% to $287.3 million, aided by cost savings initiatives and $5 million in tariff refunds.

    Reported SupportedView cited source
  12. [12]

    "We continue to experience unexpected inflationary pressure across key input costs and freight expense," chief executive officer Mike Smith said in a statement.

    Reported Supported Source: Mike Smith, Lamb Weston chief executiveView cited source
  13. [13]

    Lamb Weston lifted full-year fiscal 2027 adjusted diluted EPS guidance to a range of $3.05 to $3.35, from a prior outlook of $2.95 to $3.25.

    Reported SupportedView cited source
  14. [14]

    The company raised its adjusted EBITDA outlook to $1.125 billion to $1.215 billion, from a prior range of $1.10 billion to $1.20 billion.

    Reported SupportedView cited source
  15. [15]

    Lamb Weston revised its net sales trajectory to low-single-digit percentage growth, from an earlier projection of flat to 1% gains.

    Reported SupportedView cited source
  16. [16]

    The company returned $52 million to shareholders through cash dividends in the quarter and did not repurchase any shares.

    Reported SupportedView cited source
  17. [17]

    The board declared a quarterly dividend of $0.38 per share, payable Dec. 4, 2026, to shareholders of record as of Nov. 6, 2026.

    Reported SupportedView cited source
  18. [18]

    Lamb Weston shares have lost about 30% of their value over the past year.

    Reported Supported Source: Seeking AlphaView cited source
  19. [19]

    Seeking Alpha rates Lamb Weston a 'hold' with about 5% upside to a $50 price target.

    Reported Supported Source: Seeking Alpha analystView cited source
  20. [20]

    International segment EBITDA of $26.5 million is about a tenth of North America's $287.3 million.

    Derived Supported
  21. [21]

    Adjusted earnings of 75 cents beat the 59-cent estimate by 16 cents, about 27%.

    Derived Supported
  22. [22]

    The adjusted 75 cents is 54 cents above the GAAP 21 cents, the gap being one-time items.

    Derived Supported
  23. [23]

    The $5 million tariff refund equals about 1.7% of North America segment adjusted EBITDA of $287.3 million.

    Derived Supported
  24. [24]

    The adjusted EPS guidance midpoint rose about 10 cents, to $3.20 from $3.10.

    Derived Supported

Sources

2 independent publishers whose own reporting we read for this story.

  1. qz.com

    1 article · October 6, 2026

    Lamb Weston is raising its full-year profit forecast to up to $3.35 a share
  2. seekingalpha.com

    3 articles · October 6, 2026

    Lamb Weston: Solid Q1 As Restaurant Demand Proves Resilient

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