Lamb Weston Holdings, Inc. Q3 FY2026 earnings call

• Mike thanked the team for hard work and noted solid performance in third quarter, updated fiscal 2026 outlook with tighter guidance range. • Focus2Win strategy in place, including strengthening customer partnerships, achieving executional excellence, and setting pace for innovation. • North America business saw 12% volume growth and 5% net sales growth. • International business faced challenges due to market environment, with actions taken like closing plant in Argentina and curtailing production in Netherlands. • Developed and executed focused win strategy, set $250 million cost savings target by fiscal year-end 2028, already delivered $100 million in fiscal 2026. • New executive chair and incoming CFO, refreshed board with new members. • Strengthening customer partnerships through US commercial go-to-market strategy, executional excellence with agile supply chain, and innovation with grown in Idaho brand.

North America: Net sales increased 5%, volume increased 12% due to customer wins, share gains, and strong retention; price mix declined 7%. International: Net sales declined 1% at constant currency, volume declined 2% due to softer demand in key markets and excess international capacity; price mix declined 7% at constant currency.

• Net sales expected in range of 6.45 to 6.55 billion, adjusted EBITDA in range of 1.08 to 1.14 billion including Middle East conflict risk. • North America expects high single-digit volume growth in second half with additional week of sales in fourth quarter. • International full-year volumes still expected to grow but second half to see year-over-year declines due to lapping strong last year and Middle East conflict pressure. • Price mix in fourth quarter to remain unfavorable, adjusted gross margin expected to decline seasonally, adjusted SG&A to benefit from cost savings initiatives. • Full year tax rate expected at ~28%, full year depreciation and amortization now ~395 million vs prior ~390 million.

• International market environment with significant potato surplus in Europe, local sourcing in developing regions affecting exports, persistently lower restaurant traffic. • Middle East conflict potentially impacting volumes, commodities volatility, and inventories. • Excess international capacity remaining a factor. • Input costs excluding raw potatoes increased due to tariffs, edible oils, fuel power, water, labor, and transportation costs.

Q: Asks about utilization rates in US and international business, pricing environment in Europe.

A: In North America, utilization in low 90s with curtailed lines ramped back up; in international, actions taken on production lines. Pricing in Europe affected by capacity imbalance, slower demand, and potato crop.

Q: Asks about North America price mix, reduced CapEx guidance.

A: Expect price mix pressure into fiscal 27, reduced CapEx due to disciplined decision-making with some environmental capitals still needed.

Q: Asks about North America top line, volume trajectory, inflation and cost outlook.

A: Focus on customer partnerships, volume flow through, no additional raw write-offs anticipated.

Q: Asks about North America competitors, supply chain footprints.

A: Can't speak to competitors but winning with customers.

Q: Asks about potato write-off in Europe, North America portfolio management.

A: Adjustments in raw procurement in Europe, prioritizing markets and channels with new executive.

Q: Asks about North America utilization rate, international competitors.

A: Most curtailed lines restarted in North America, pace of industry capacity curtailments slowed.

Q: Asks about cost savings program, portfolio management.

A: On track to exceed $250 million target, prioritizing markets and channels with new executive assessing businesses.

Q: Asks about Mideast conflict and costs.

A: Impact depends on conflict length/severity, risks include lower volumes, commodities volatility, hedging program in place to reduce price risk