Lamb Weston Holdings, Inc. ($LW) Earnings (Q3 FY22)

 Lamb Weston Holdings, Inc. ($LW) Earnings and Opinion:


Lamb Weston Holdings, Inc. is a company in the Consumer Defensive sector and operates in the 
Packaged Foods industry. The company offers value-added frozen potato product worldwide. Lamb Weston Holdings was founded in 1950 and is currently headquartered in Eagle, Idaho. The company was first introduced on the stock market in 2016.

Lamb Weston Holdings, Inc. EPS and Revenue (Q3 FY22):

  • EPS of $0.73 beating expectations of $0.44
  • Revenue of $955M missing expectations of $962.44M
  • EPS was up 62% (YOY) and Revenue was up 7% (YOY)
Lamb Weston Holdings, Inc. Q3 Highlights:
  • Income from Operations of $133.8M, up 33% (YOY)
  • Net income of $106.6M, up 61% (YOY)
  • Adjusted EBITDA of $219.6M, up 31% (YOY)
Lamb Weston Holdings, Inc. FY22 Outlook:
  • Net sales growth will be above long-term target of low-mid single digits
  • Gross margin of 19-20%
  • Cash used for capital expenditures of $325M
Opinion:
Lamb Weston Holdings is currently trading higher today after providing a solid outlook for the rest of the 2022 fiscal year. They also had a strong beat on EPS, but missed expectations on Revenue. I think this was overlooked by investors because they grew EPS by 62% (YOY) and Net Income by 61% (YOY). This is strong for a company that doesn't have a huge target market due to the fact that specialize in the products they sale. When we look at the valuation of the company, we can see that the company has a lot of money in debt, which can be bad for long-term outlook. They also pay out a dividend of about 1.60% and they have a payout ratio of around 71%. I think they need to make some adjustments and start getting rid of some of the debt before they get too far along giving returns to shareholders. You have to commend them though because they have been growing at a pretty good rate year-over-year, so they have some things going for them. Personally, I am not going to invest in this company. I think it has too small of a target market and they will need to pick up some serious acquisitions if they want to compete with some of the other companies in this industry. I have to give credit to them though, they are doing a mighty fine job in growing. I just see my money returning me more in other areas.

*Information from Yahoo Finance, Lamb Weston Holdings, and Nasdaq
*Estimates attained from Zacks

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