Lamb Weston Chair Says The Company Is Worth More Than Its Stock Price, After Replacing Half The Executive Team
Executive Chair Jan Craps also pointed to a smaller board, a zero-based budget push and a merged APAC region, with an investor day set for early 2027.
Lamb Weston's executive chair told analysts on the company's first-quarter fiscal 2027 earnings call that the market is undervaluing the business. Jan Craps said: "We also see greater value in the company than what we believe is reflected in the current stock price."
What management said on the call
Craps said the company has "changed half of the executive leadership team." He said target-setting and pay now carry individual and regional accountability, and that the board was cut to 11 members from 13.
He also described a new budgeting routine. Lamb Weston has begun zero-based budgeting, in which every spending line is reviewed from scratch, and Craps said it is already producing real savings in its first phase.
The supply chain team held its first "savings championship." More than 70 people from all regions and supply chain functions took part, benchmarking and trying to stretch past planned cost-savings initiatives.
Craps said the strategy work on where to play has already prompted capacity rationalization at the company. He added that it "may lead to partnership and divestiture opportunities."
Craps also said the company raised its full-year forecast for net sales, adjusted earnings per share and adjusted EBITDA.
The international overhaul
CEO Mike Smith said International President Mark Schroeder will leave at the end of the calendar year. An outside search for a successor is underway.
Smith said Lamb Weston will fold its China and Asia Pacific regions into one APAC region. The company is also reducing management layers, widening spans of control and eliminating some open roles.
Smith said International results met guidance but fall short of long-term aspirations. He added that segment adjusted EBITDA margin should improve from first-quarter levels.
BNP Paribas analyst Max Gumport asked about divestitures. Management said the strategy work could lead to partnerships and divestitures in the future, but said it was too early to give detail on the growth algorithm before an investor day.
Stephens analyst Pooran Sharma asked whether the restructuring was about cost or execution. Smith said execution, and said the company would not disclose a savings figure for now.
What to watch
Management said it will lay out its market and channel priorities at an investor day in early calendar 2027. The international president search is still open.
Until the investor day in early calendar 2027, the company has given no savings figure for the international restructuring.
Sources
- Lamb Weston Hldgs Reports Q1 2027 Results: Full Earnings Call Transcript — benzinga.com
- Lamb Weston Lifts Fiscal 2027 Outlook - WSJ — The Wall Street Journal
- Lamb Weston Beats Q1 Expectations, Raises 2027 Outlook As Cost-Saving Efforts Gain Traction — benzinga.com
- https://seekingalpha.com/news/4650468-lamb-weston-rallies-after-cost-saving-measures-help-the-bottom-line — seekingalpha.com
- Compared to Estimates, Lamb Weston (LW) Q1 Earnings: A Look at Key Metrics — Yahoo Finance
