Updated full-year inflation view vs ~3% prior.

Non-potato input costs about 100 bps higher; freight, edible oils, packaging, ingredients; offset by cost savings first, then pricing including formula clauses and Europe increase. “we're about 100 basis points higher on our inflation expectation for the year.”

How does NA price/mix for the year shake out versus prior low-single-digit decline guide?

About 70% of contracts done, no surprises; price/mix to keep improving, half price and half mix; volume growth moderates; NA modest top-line growth with EBITDA growth from pricing and savings. No updated numeric price/mix guide. “about half of that is price, half of that's mix.”

Are competitors changing behavior and is it embedded in outlook?

Poor crop and closures (Broekhuizenvorst, Belgium, German project, over 1 billion pounds) limit capacity use; utilization to rise ~10 pts to low 90s. International net sales closer to flat for the year. “we're probably seeing for the full year, net sales closer to flat”

Lamb Weston (LW) Q1 FY27 earnings call: guidance and Q&A

Earnings call· Aug 2026 (Q1 FY27)· Consumer Staples· Oct 6, 2026

Source: earnings call transcript

Executive summary

Lamb Weston Q1 FY27 — North America volume momentum drives beat and raised FY27 outlook

A beat-and-raise quarter anchored by North America share-of-wallet gains with chicken-heavy QSRs, while International remains the drag. Management is leaning on cost savings, ZBB and a flatter org to offset persistent inflation, with industry capacity rationalization and a tight European crop improving supply/demand. Pricing realization and international margin recovery are the swing factors.

Highlights

Net sales of $1.67B, up 1% YoY, with adjusted diluted EPS of $0.75 (non-GAAP), up 1% YoY, both above guidance
Adjusted EBITDA (non-GAAP) of $286M, down 5% YoY but 'substantially better' than expectations
North America sales volume +7% (seventh consecutive quarter of growth), net sales +5%, segment adjusted EBITDA +11%
Free cash flow of $144M on $235M cash from operations and $91M capex; $52M returned via dividend
FY27 outlook raised: net sales to low single-digit growth, adjusted EPS $3.05-$3.35, adjusted EBITDA $1.125B-$1.215B

Concerns

International net sales -8% (volume -6%, price/mix -2%); segment adjusted EBITDA fell to $27M on EMEA competitive pricing and prior-year potato cost carry-in
Company price/mix -1.8% (North America -1.7%) as pricing is a drag despite sequential improvement
Non-potato input cost inflation now ~100 bps higher than prior expectation (freight, edible oils, packaging, ingredients)
European crop tonnage down ~15-20% due to heat/drought, raising potato costs and requiring spec changes
Net debt $3.8B, 3.3x net debt/adjusted EBITDA (TTM); operating cash flow declined YoY (last year had $136M inventory benefit); FCF guide unchanged
International leadership turnover (President of International departing at calendar year-end)

Guidance & targets

Category	Target	Timeline	Confidence
FY27 net sales growth	Low single-digit growth high materiality	FY27	Medium
FY27 adjusted operating income	$730M to $810M high materiality	FY27	Medium
FY27 adjusted EPS	$3.05 to $3.35 high materiality	FY27	Medium
FY27 adjusted EBITDA	$1.125B to $1.215B high materiality	FY27	Medium
FY27 interest expense	$185M to $190M low materiality	FY27	Medium
FY27 effective tax rate	25% to 27% low materiality	FY27	Medium
FY27 cash capital expenditures	~$380M to $410M cash; $330M-$350M accrual basis medium materiality	FY27	High
FY27 cash provided by operations	$750M to $800M high materiality	FY27	Medium
Q2 FY27 net sales	Up low single digits medium materiality	Q2 · FY27	Medium
Q2 FY27 adjusted EBITDA	Up high single digits to low double digits high materiality	Q2 · FY27	Medium
FY27 International net sales	Closer to flat medium materiality	FY27	Medium
FY27 International segment adjusted EBITDA margin	Improve from Q1 levels medium materiality	FY27	Medium
North America FY27 top line and EBITDA	Modest top-line growth; EBITDA growth from pricing and cost savings; volume growth moderating medium materiality	FY27	Medium
EMEA capacity utilization	More than 90% (low 90s), ~10 pts improvement medium materiality	Following Broekhuizenvorst closure	Medium
Customer contract renewals	Most outstanding discussions completed over next 2 quarters medium materiality	Next 2 quarters · FY27	Medium
Investor Day	Strategy update and growth algorithm in early calendar 2027 low materiality	Early CY27	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
North America Seventh consecutive quarter of volume growth; cost savings, $5M tariff refunds and improved RDO JV earnings helped. Sales volume: +7%Price/mix: -1.7%Price/mix (prior quarter): -2.4%	—	Net sales +5%	—	Segment adjusted EBITDA +11% YoY; gross margin expanded
International EMEA competitive pricing and potato cost carry-in; China net sales and adjusted EBITDA grew; Asia Pacific slower volume start; Latin America ramping Mar del Plata. Sales volume: -6%Price/mix: -2%	—	Net sales -8%	—	Segment adjusted EBITDA $27M, up sequentially vs Q4, down YoY

Product announcements

Product	Type	Timeline	Details
Reduced sodium tater puffs and star-shaped puffs	launch	Not stated
Black Pepper flavored stars (China LTO)	launch	Not stated

Deals & partnerships

RDO (joint venture) Joint venture

Mentioned as a driver of NA segment EBITDA growth.

Potential partners (international clusters) Possible partnership and divestiture opportunities from where-to-play work

No specifics; more detail at Investor Day in early calendar 2027.

Capital programs

Cost savings program / zero-based budgeting underway

Spent to date: Described as well ahead of plan

Start: Cost savings program began over a year ago; ZBB newly launched

Benefit:Margin expansion and reinvestment in growth; no dollar target stated

'we're well ahead of our cost savings plan'; ZBB realizing savings in first phase.

Broekhuizenvorst facility closure and EMEA network consolidation underway

Start: Q1 FY27

Benefit:EMEA utilization up ~10 pts to low 90s

Customer fulfillment transitioned to other Lamb Weston locations.

Risks & headwinds

Persistent input cost inflation FY27

Non-potato inflation ~100 bps above prior expectation

Mitigation:Cost savings, ZBB, pricing, formula-based clauses

European crop shortfall and potato cost 2026-27 crop year

Tonnage down ~15-20%

Mitigation:Contracted supply, spec changes, European price increase

Price/mix drag FY27

Company -1.8%; North America -1.7%

Mitigation:Contract repricing, targeted pricing

International weakness and leadership transition FY27

Net sales -8%, EBITDA $27M

Mitigation:Capacity rationalization, APAC consolidation, org redesign, CEO search for successor

Moderating North America volume growth Rest of FY27

Not quantified

Mitigation:Innovation, new wins, LTOs

Leverage Ongoing

3.3x net debt/adjusted EBITDA; $3.8B net debt

Mitigation:Adjusted EBITDA growth

What to watch in Q2 FY27

Q2 adjusted EBITDA growth

Q2 FY27

Current Q1 $286M, -5% YoY

Target Up high single digits to low double digits

Why it matters

Tests earnings inflection and ability to offset inflation

we anticipate adjusted EBITDA to be up high single digits to low double digits.

Find out whether LW delivers this. Inve re-checks your case every morning.

Q&A highlights

What drives continued volume outperformance given softer traffic commentary from largest customer?

Favorable customer mix with growing QSRs, customer segmentation ('winning with the winners'), better fill rates, joint business planning, new wins and innovation, plus cost-saving initiatives.

“we're winning with the winners.”

asked by Peter Galbo (Bank of America) · answered by Mike Smith

2 min read 6 chapters

Detailed narrative

Q1 results and guidance raise

Net sales were $1.67B (+1%), driven by volume +2% offset by price/mix -1.8%, with FX not meaningful. Adjusted EBITDA of $286M was down 5% on EMEA potato cost carry-in but well ahead of expectations. Management raised FY27 net sales, adjusted EPS and adjusted EBITDA outlooks, roughly passing through the Q1 beat.

North America momentum

Volume grew 7% for a seventh straight quarter, outpacing a soft market (Circana CREST: US restaurant traffic flat, QSR traffic -1%, QSR chicken traffic +4%). Lamb Weston over-indexes to chicken QSRs, has improved fill rates and joint business planning, and is 'winning with the winners'.

Gross margin expanded and segment EBITDA rose 11%, helped by cost savings, $5M of tariff refunds and better RDO JV earnings. Volume growth is expected to moderate as new-customer wins lap.

Pricing, contracts and inflation

About 70% of North America contracts for renewal this year are complete with high retention; the rest should close in the next two quarters. Price/mix was -1.7%, split equally between price and mix, improving 70 bps from Q4's -2.4%. Non-potato input inflation expectations are ~100 bps higher, driven by freight, edible oils, packaging and ingredients, offset via cost savings, Spring '26 pricing, formula-based pass-through clauses and a European price increase.

International and Europe supply dynamics

International net sales fell 8% (volume -6%, price/mix -2%) amid competitive EMEA pricing; QSR traffic was -1% in the UK, France, Italy and Germany, Spain flat. Segment adjusted EBITDA was $27M. The Broekhuizenvorst plant has stopped production, and with a Belgian closure and a cancelled German plant removing over 1 billion pounds of capacity, a tight crop (tonnage down ~15-20%) should lift industry utilization.

China grew on multinational chains and LTOs; Latin America ramps its Mar del Plata plant; China and APAC consolidate into one region.

Cost programs and organization redesign

Management is running its cost savings program, enterprise-wide zero-based budgeting, a supply-chain savings championship, and an organization redesign that reduces layers and consolidates regions. Adjusted SG&A was flat YoY. No savings dollar figure was disclosed for the redesign. The Board was reduced to 11 from 13 and half the executive team has changed; Mark Schroeder, President of International, will depart at calendar year-end.

Cash flow, leverage and capital

Operating cash flow was $235M, lower YoY as last year benefited from a $136M inventory improvement; this year benefited $59M from higher payables via improved supplier terms. Capex was $91M and FCF $144M. Net debt is $3.8B (3.3x TTM). Dividend of $0.38 per share was declared, payable December 4. Strategic review may lead to partnerships or divestitures; Investor Day in early calendar 2027.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.