Lamb Weston sees sluggish potato market turning around

After several difficult years, Lamb Weston has cautiously recovered. The listed American potato company performed better than expected in fiscal year 2026 and exceeded its own guidance. In particular, the North American operations picked up. The European market remains challenging. Lamb Weston has realized revenue of $6.61 billion, an increase of 2% compared with a year earlier. Ebitda fell by 9% to $1.15 billion, but came in above the previously issued forecast. Net profit fell by 19% to $290 million. According to the company, customer investments, margin pressure and higher production costs weighed on the results. Volumes growing againStill, CEO Mike Smith sees an important turning point in the market. The company managed to maintain revenue and profitability better than expected, helped by strong volume growth in North America. There the company benefited from new customer contracts and, the company said, growing market share. Sales volumes have now grown for six consecutive quarters. To further improve profitability, Lamb Weston is continuing its cost-cutting plans. More than $100 million in structural cost savings has already been achieved. By the end of fiscal year 2028, annual structural cost savings are expected to reach at least $250 million. Europe still lags behindDespite the recovery, market conditions in Europe remain challenging. The international division, which also includes the Dutch operations, saw adjusted Ebitda fall by 55% to $115 million. According to Lamb Weston, the operations in Europe, the Middle East and Africa are dealing with continued price pressure, higher production costs and strong competition. The company was also affected by disruptions caused by the conflict in the Middle East. These have led to additional write-downs on inventories. For the current fiscal year, Lamb Weston expects results to stabilize. The company is aiming for revenue growth of up to 1% and an equally stable Ebitda. The company notes that the outlook will continue to depend on economic developments that affect market conditions. Share price recoversThat Lamb Weston seems to be leaving the difficult period behind has also been noticed by investors. The share price has recently recovered to nearly $50 per share after a series of sharp declines. In April, the stock was still trading below $40.