Lamb Weston Holdings posted a year-over-year rise in net income of 61% in the most recent fiscal quarter, buoyed by a comeback in restaurant business and the higher prices it’s charging for its products.
Overall net sales for the third fiscal quarter were $955 million, a 7% increase from the third quarter of last year. Net income was $106.6 million, a 61% leap from last year.
However, for fiscal 2022 to date, Lamb Weston’s net income is still 33% behind last year’s pace. Overall volume for the quarter was down 5%.
Foodservice was the bright spot for Lamb Weston, as consumers returned to restaurants with a voracious appetite for French fries. Foodservice net sales were $294.5 million in the third quarter, a 34% gain. “The ongoing recovery in demand at full-service restaurants and in non-commercial channels...drove the increase in sales volumes,” the company said in a statement.
Retail, on the other hand, was down 12% in dollar sales and 24% in volume. Lamb Weston’s report attributed this to “lower production run-rates and throughput in the factories.”
While expenses for potatoes, cooking oil and other ingredients increased, Lamb Weston was able to raise prices so that “the benefits from higher price/mix more than offset the impact of higher manufacturing and distribution costs on a per pound basis, as well as lower sales volumes,” its report says.
