Lamb Weston Increases Dividend Following Return to Profitability in Second Quarter
Eagle, Friday, 19 December 2025.
Lamb Weston reversed prior losses to post $62.1 million in net income, encouraging a 3% dividend hike even as competitive pricing pressures weighed on overall revenue performance.
Earnings Recovery Beats Expectations
Lamb Weston Holdings, Inc. (LW) reported a significant turnaround in profitability for the second quarter of fiscal 2026, posting net income of $62.1 million compared to a net loss of $36.1 million in the same period last year [1]. This performance translates to diluted earnings per share (EPS) of $0.44, marking a substantial recovery from the loss of $0.25 per share recorded in the prior year’s quarter [1]. When adjusting for non-recurring costs, earnings came in at $0.69 per share, surpassing Wall Street expectations; analysts surveyed by Zacks Investment Research had projected adjusted earnings of $0.67 per share [3].
Volume Growth Offsets Pricing Pressures
Top-line revenue for the quarter reached $1.618 billion, a modest increase of 1.074% from the previous year’s $1.601 billion [1]. This figure also exceeded market forecasts, beating the $1.59 billion estimate from Zacks-surveyed analysts [3]. However, the revenue growth masks a complex underlying dynamic: while the company achieved an 8% increase in sales volume, this gain was entirely neutralized by an 8% decline in price/mix [1]. This indicates that while Lamb Weston moved significantly more product, competitive pricing pressures required them to sell at lower effective rates to maintain market share.
Segment Performance and Operational Efficiency
The pricing challenges were particularly evident in the North America segment, where net sales remained essentially flat at $1.069 billion despite an 8% surge in volume, as the price/mix dropped by an equivalent 8% [1]. Conversely, the International segment saw sales rise by 4% to $548.6 million, bolstered by a favorable foreign currency impact of $22.6 million [1]. Despite the sales growth abroad, the International segment faced profitability headwinds, with Adjusted EBITDA declining due to increased production costs and start-up expenses associated with a new facility in Argentina [4].
Shareholder Returns and Fiscal Outlook
Reflecting confidence in its financial stability, the Board of Directors authorized a 3% increase in the quarterly dividend to $0.38 per share [1]. This dividend is scheduled to be paid on February 27, 2026, to shareholders of record as of January 30, 2026 [1]. Looking ahead, management reaffirmed its full-year fiscal 2026 guidance, projecting net sales between $6.35 billion and $6.55 billion and Adjusted EBITDA in the range of $1.00 billion to $1.20 billion [1]. This reaffirmation suggests that despite the competitive pricing environment, Lamb Weston expects its volume growth and cost-saving initiatives to sustain its financial trajectory through the remainder of the fiscal year [1].