EAGLE, IDAHO — Persistent weakness in foodservice, particularly the quick-service restaurant (QSR) category, continued to weigh on Lamb Weston Holdings Inc., during the third quarter of fiscal 2025. In response, the company continued to right-size its manufacturing footprint to align production with demand.

“While we do not anticipate a near-term improvement in the demand environment, we are controlling what we can control,” said Mike Smith, president and chief executive officer, during an April 3 conference call to discuss the quarterly results. “We are focusing on gaining share, driving growth with existing customers, winning new customers, and operating with excellence.”

In the United States, QSR traffic declined 2% when compared to the same period of the previous year, and at QSR chains specializing in hamburgers, traffic was down 6%, said Bernadette Madarieta, chief financial officer.

“As a reminder, about 85% of our North American sales are from food-away-from-home channels, and the majority of that volume is sold through QSRs,” she said.

This past October, Lamb Weston unveiled a restructuring plan that included the closing of a processing plant in Connell, Wash., reducing production at other facilities and a reduction in global headcount by 4%.

Smith said the reduction in demand came down to “uncertainty with the consumer.”

“There's obviously a lot going on from a macroeconomic perspective,” he said. “We’re taking all those demand signals into account as we think about … the raw (potatoes) that we’re sourcing, as well as the amount of downtime we’re potentially taking in our facilities with curtailments but also have the flexibility should things turn around to bring those lines and facilities back on so that we can keep up with any changes in demand.”

For the quarter ended Feb. 23, Lamb Weston earned $146 million, equal to $1.03 per share on the common stock, and flat when compared with the same period of the previous year when the company earned $146.1 million, or $1.01 per share.

The company is looking for new opportunities from in-home consumption occasions. 

Source: ©MILJAN ZIVKOVIC – STOCK.ADOBE.COM 

Quarterly sales rose to $1.52 billion from $1.46 billion the year before.

In the company’s North America segment, sales rose 4% to $986 million from $948 million the year before. Business unit volume rose 8% while price/mix fell 4%, according to the company.

Smith said Lamb Weston has shifted some of its innovation to the “in-home consumption space.”

“… We recently launched new private label products across the grocery and club channels that are off to a great start,” he said. “We are working to build upon wins like these as we continue to identify new and growing customers to drive long-term sustainable growth in our business.”

Other new in-home product introduced included battered and seasoned products as well as fries and tots that may be refrigerated for up to 7 days.

“In our North America retail channel, we’ve expanded our licensed brand portfolio to include onion rings and cheesy potato bites, and internationally, we launched a reimagined classic fry, the three-sided frenzy fries, and are receiving very positive feedback and demand signals,” Smith said.

International business unit sales rose 5% to $301 million from $286 million.

The company reaffirmed its guidance for the rest of the fiscal year of net sales in a range between $6.35 billion and $6.45 billion, and net income in a range between $440 million to $460 million.