Frozen-potato demand is even colder than frozen potatoes

Shares of frozen-potato purveyor Lamb Weston are “spuddering,” down 20% after slashing its full-year earnings-per-share outlook along with the release of poor quarterly results.

Management lowered its fiscal 2025 guidance (that is, for the upcoming two quarters) on net sales, adjusted EBITDA, and adjusted EPS, with CEO Tom Werner saying, “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.”

Net sales growth is now expected to be flat, at best, for this fiscal year. The cut to its full-year adjusted-earnings-per-share guidance was particularly dramatic, down from a range of $4.15-$4.35 to $3.05-$3.20.

Telling the world how the company is doing hasn’t exactly been a fun time for management. The stock has slumped double digits in the wake of three of its last four quarterly reports. The company has also recently been the target of a price-fixing lawsuit along with other members of “Big Potato.”