The Lamb Weston frozen potato business closed out its first fiscal year as an independent business saying it exceeded its financial goals.
The results were a “strong foundation for sustainable growth as an independent company,” says Tom Werner, the company’s president and CEO.
In a November 2016 spinoff deal, shareholders of the former ConAgra Foods received shares of both Lamb Weston and the new Conagra Brands. Conagra shed the frozen potato business to concentrate on branded grocery foods sold at retail stores.
Lamb Weston, now headquartered in Idaho, on Tuesday reported a 6 percent increase in sales for the 2017 fiscal year ending May 28, to $3.2 billion, and net income for the year of $326.9 million. Earnings per share were up 16 percent for the year, to $2.22.
For the fourth quarter, net income of $75.9 million resulted in earnings per share of 51 cents, up 76 percent from the same quarter a year ago. Analysts surveyed by FactSet expected quarterly earnings of 49 cents per share. Shares of Lamb Weston rose more than 2 percent on Tuesday, to close trade on the New York Stock Exchange at $45.68 each.
While there is still work to do to complete the business’s separation from Conagra, Werner said that the spinoff was not a distraction and that Lamb Weston was able to sell more of its potato products and charge higher prices. There’s big demand for fries in restaurants, cafeterias and grocery stores.
“This is a category that has been growing, and we anticipate demand will continue to increase,” says Werner.
Lamb Weston added new potato processing lines in manufacturing plants in the U.S. and internationally, and has more in the works.
It’s working with customers to develop new products—some more healthful-sounding than others. New products include those with a “clean label” and a short ingredient list, as well as something called the Waffle Waffle Fry: a waffle-cut sweet potato fry, coated in waffle batter, fried and intended to be served with dips or toppings.
Lamb Weston also launched a new product in retail stores: the Made in Idaho brand of frozen potato products, including fries and hash browns.
Source: Omaha World-Herald