Volume declined 5%, primarily reflecting softer casual dining and full-service restaurant traffic in the U.S. as well as the timing of shipments to large chain restaurant customers.
Net sales from the Global segment rose 12% Y/Y, Foodservice increased 14%, and the Retail segment climbed 28%.
Gross profit increased 80.6% Y/Y to $273.3 million, and the gross margin expanded 890 basis points to 24.3%.
The operating margin was 13.9%, and operating income for the quarter jumped 161% to $157 million.
Adjusted EBITDA increased 92% Y/Y to $228 million.
Adjusted EPS of $0.75 beat the analyst consensus of $0.49.
Lamb Weston held $485.3 million in cash and equivalents as of August 28, 2022. Net cash from operating activities for the quarter totaled $192.1 million.
"While volume declined as a result of softer restaurant traffic trends and supply chain constraints impacting production run-rates in our plants, we continued to make progress in improving customer service levels," said CEO Tom Werner.
Outlook: Lamb Weston reaffirmed the FY23 EPS forecast of $2.45 - $2.85 versus the consensus of $2.79.
It sees FY23 sales of $4.7 billion - $4.8 billion, against the consensus of $4.77 billion.
"We continue to manage through this difficult macro environment and are on track to deliver the higher end of our fiscal 2023 financial targets, including gross margins approaching normalized levels during the second half of the year," Werner added.
Price Action: LW shares are trading higher by 2.85% at $81.10 on the last check Wednesday.
See more from Benzinga
Don't miss real-time alerts on your stocks - join Benzinga Pro for free! Try the tool that will help you invest smarter, faster, and better.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.