Michael Smith, current chief operating officer of Eagle, Idaho, USA-headquartered Lamb Weston, is set to assume the roles of president, chief executive officer and member of the board of directors on January 3. He will succeed Thomas Werner, who while stepping down as ceo and board member, will remain on board in an advisory role through August 31, 2025 to ensure a smooth transition.
Smith (pictured above) joined the value added frozen potato products company in 2007 and has served in increasingly senior leadership roles during his 17-year career at Lamb Weston. He has been a key leader, driving strong growth across multiple areas.
W.G. Jurgensen, chairman of the board, stated: “We are pleased to have Mike lead Lamb Weston through the next phase of the company’s growth. His appointment represents the culmination of a thoughtful, years-long succession planning process by our board, and we are confident he is the right leader to guide us forward. Mike has developed a deep understanding of all critical aspects of our business and commercial operations. He will also bring a fresh perspective to the role along with a blend of strategic thinking and a laser focus on capturing current market and operational opportunities, as well as a deep appreciation for our employees, customers and partners.”
Second Quarter 2025 Results
Meanwhile. on December 19 the company announced figures for Q2 fiscal 2025 and updated its full year financial targets for fiscal 2025.
Net sales during the second quarter fell 8% to $1,601 million, while income from operations slumped 94% to $19 million and net income declined $251 million to a loss of $36 million. Diluted EPS declined $1.73 to a loss of $0.25.
Non-GAAP results as compared to Q2 fiscal 2024 figures were posted as follows: adjusted income from operations fell 41% to $178 million, while adjusted net Income declined 55% to $95 million; adjusted diluted EPS was down 54% to $0.66; adjusted EBITDA declined 25% to $282 million; $51.6 million in cash dividends was paid to common shareholders.
Updated Fiscal 2025 Outlook
The updates fiscal 2025 outlook is for net sales of $6.35 billion to $6.45 billion. The GAAP net income target is $330 million to $350 million, with a Diluted EPS target of $2.30 to $2.45. Adjusted EBITDA is $1,170 million to $1,210 million, while the Adjusted Net Income is $440 million to $460 million and the Adjusted Diluted EPS target is $3.05 to $3.20.
GAAP Results include a $159 million pre-tax charge related to the Restructuring Plan announced on October 1, 2024
“Our financial results in the second quarter were below expectations,” said Werner. “Higher than expected manufacturing costs and softer volumes accounted for the shortfall, while price/mix and operating expenses were broadly in line with our targets for the quarter.”
He added: “In terms of the broader operating environment, we expect challenging conditions to persist through the remainder of fiscal 2025 and into fiscal 2026, driven primarily by an accelerating rate of capacity additions and continued near-term softening of global frozen potato demand below historical rates, particularly outside North America, until demand trends improve and capacity expansion normalizes. As a result, we are reducing our fiscal 2025 financial targets.”
Werner concluded: “The company continues to take prudent steps to successfully adapt to this dynamic environment. In addition to the cost benefits we expect to realize from our restructuring plan, including our previously announced actions to permanently close or temporarily curtail production lines to better manage our factory utilization rates, we are actively evaluating additional cost-savings opportunities as we work to better align our operations with the current environment. This includes efforts to reduce manufacturing and supply chain costs and operating expenses to protect and improve profitability. We are executing with urgency and discipline to make lasting improvements to our operations as we weather what we believe are transitory challenges, and we remain focused on leveraging our solid fundamentals and balance sheet to deliver value to shareholders.”
