Lamb Weston's Cash Flow Got A $59.2 Million Lift From Suppliers While Net Income Fell To $29.1 Million
The 10-Q shows higher accounts payable propped up operating cash, as a $33.0 million legal accrual and pending lawsuits sit alongside the results.
Lamb Weston's first-quarter operating cash flow of $234.8 million got $59.2 million from higher accounts payable, according to the company's 10-Q filed Tuesday. Net income fell to $29.1 million from $64.3 million a year earlier.
What the 10-Q says about cash
Management said it is working with suppliers "to improve terms," which is the change that pushed payables up and lifted operating cash. That is a different source of cash than a year ago.
The year-earlier quarter produced operating cash flow of $352.0 million. It included a $136.3 million release of inventory and a $47.7 million outflow from payables. This quarter, inventories contributed $1.5 million, per the filing.
Adjusted EBITDA, a measure of earnings before interest, taxes and certain charges, was $285.6 million. It excludes a $33.0 million accrual for legal proceedings, a line the prior quarter's filing did not show.
The legal docket
Securities, antitrust and Oregon groundwater lawsuits are all pending. In the antitrust case, the federal claims survived a September 17 ruling and head to discovery. The company says it cannot estimate a range of loss.
In the securities class action, the plaintiffs' response to the dismissal motion landed October 2, with the defendants' reply due October 23. The 10-Q says the company continues to believe the plaintiffs' claims lack merit and will defend vigorously.
In the Oregon lawsuit, a June ruling rejected a dismissal motion, and trial is set for September 2027, the company reports.
Weak spots and the balance sheet
The International segment, especially Europe, is the weak spot. Its adjusted EBITDA fell to $26.5 million from $57.2 million, and the company is closing its Broekhuizenvorst plant in the Netherlands, which is expected to produce through mid-second quarter of fiscal 2027.
The company bought no shares in the quarter, leaving $245 million of repurchase authorization. Of its roughly $3.9 billion debt, $2,925.0 million is fixed-rate.
Shares rose about 11% to $49.36 in Tuesday trading, as of 11:05 a.m. ET (market data).
Defendants' reply in the securities class action is due October 23, and the company plans an Investor Day in early calendar 2027, per Seeking Alpha.
Sources
- 10-Q Filing — Lamb Weston (LW) — SEC EDGAR
- 10-Q Filing — Lamb Weston (LW), Q1 2026 filed 2026-04-01 (comparison basis) — SEC EDGAR
- 10-K Filing — Lamb Weston (LW), filed 2026-07-24 (earlier disclosure) — SEC EDGAR
- 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
