Shares of Lamb Weston Holdings, Inc. (NYSE: LW) stayed green on Friday. The stock has dropped 19% over the past three months. The French fry giant is slated to report its third quarter 2025 earnings results on Thursday, April 3, before the market opens. Here’s a look at what to expect from the earnings report:
Revenue
Analysts are projecting revenue of $1.5 billion for Lamb Weston in Q3 2025, which indicates a growth of over 2% from the same period a year ago. In Q2 2025, net sales declined 8% year-over-year to $1.6 billion.
Earnings
The consensus target for Q3 2025 earnings per share is $0.87, which implies a decline of 27% from the year-ago period. In Q2 2025, adjusted EPS decreased 54% YoY to $0.66.
Points to note
Lamb Weston has been facing a challenging operating environment marked by softness in demand for frozen potato products and capacity expansions by competitors. The company expects these headwinds to persist through fiscal year 2025 and into fiscal year 2026, which led it to lower its guidance for full-year 2025. These factors may have impacted the Q3 performance.
The potato products maker’s performance in the second quarter of 2025 came below its expectations due to higher manufacturing costs and softer volumes. Volumes in Q2 fell 6%, impacted by a drop in restaurant traffic in the US and many key international markets, as well as customer share losses due to heavy competition. Volumes were also impacted by the exiting of certain low-price, low-margin business in the Europe, Middle East, and Africa region but this headwind is not expected to continue in the third quarter.
Although restaurant traffic in the US is being buoyed by higher promotional activity by quick service restaurants (QSRs), there has been a downsizing in serving sizes of French fries, which pose headwinds to volumes.
LW anticipates volume pressures in North America during the second half of the year from the loss of a chain restaurant customer, and a larger-than-expected impact from the reductions in serving sizes. International volumes are expected to be impacted by customer share losses due to heavy competition, and soft restaurant traffic. These pressures are expected to be offset by some new customer wins and the regaining of share of some lost customers. The company has forecast sales of $3.1-3.2 billion for the second half of the year, representing growth of 1-4% YoY. These benefits may have aided the third quarter results.
Lamb Weston may also see benefits from cost savings generated by its restructuring plan. As part of its restructuring efforts, the company cut back production across certain lines, lowered headcount and reduced certain other expenses.
