Lamb Weston's (LW) Queued for Q2 Earnings: Things to Note
Lamb Weston Holdings, Inc. LW is likely to register top-line growth when it reports second-quarter fiscal 2022 numbers on Jan 6. The Zacks Consensus Estimate for revenues is pegged at $1,002 million, suggesting an increase of 11.8% from the prior-year quarter’s reported figure.
Lamb Weston’s bottom line is likely to decline year over year in the fiscal second quarter. The Zacks Consensus Estimate for quarterly earnings has moved down by a couple of cents to 33 cents per share in the last seven days. The projection suggests a 50% slump from the year-ago quarter’s reported figure. In the last reported quarter, the company reported a negative earnings surprise of 47.4%. This producer, distributor and marketer of value-added frozen potato products has a trailing four-quarter negative earnings surprise of 12.6%, on average.
Things to Note
Lamb Weston is gaining from strong recovery in away-from-home frozen potato products demand. In its last earnings call, management highlighted that for second-quarter fiscal 2022 it continues to expect net sales growth to be driven by higher volume, reflecting recovery in demand for frozen potato products as well as a favorable comparison from the prior-year quarter’s soft shipments. The company also stated that it expects to begin realizing the benefits from pricing actions in the quarter under review.
Apart from this, management is on track with its Win As One initiatives. As part of the same, the company is arranging lean manufacturing and productivity tools to enhance productivity savings, cost structure, improve operations and margin levels. The company has also been benefiting from efforts to boost offerings and capacity.
However, Lamb Weston has been seeing elevated costs for a while now. In this respect, the company expects persistent pressures from supply-chain volatility, labor availability as well as considerable cost inflation of key production inputs, packaging and transportation. In addition, escalated SG&A expenses are a concern. These factors are likely to have hurt Lamb Weston’s performance in the to-be-reported quarter.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Lamb Weston this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Lamb Weston currently carries a Zacks Rank #4 (Sell) and has an Earnings ESP of 0.00%.
Some Stocks With Favorable Combinations
Here are some companies that you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat.
Constellation Brands STZ currently has an Earnings ESP of +2.13% and a Zacks Rank #3. The company is expected to register a bottom-line decline when it reports third-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for its quarterly earnings has remained unchanged in the past 30 days at $2.82 per share. The projection suggests a 8.7% decline from the year-ago quarter’s reported figure. You can see the complete list of today’s Zacks #1 Rank stocks here.
Constellation Brands’ top line is expected to fall year over year. The consensus mark for revenues is pegged at $2,282 million, indicating a decline of 6.4% from the figure reported in the year-ago quarter. STZ has a trailing four-quarter earnings surprise of 8.8%, on average.
McCormick & Company, Incorporated MKC currently has an Earnings ESP of +0.75% and a Zacks Rank #3. The company is expected to register bottom-line growth when it reports fourth-quarter fiscal 2021 numbers. The Zacks Consensus Estimate for its quarterly earnings has remained unchanged in the past 30 days at 80 cents per share. The projection suggests a 1.3% increase from the year-ago quarter’s reported figure.
McCormick’s top line is expected to grow year over year. The consensus mark for revenues is pegged at $1,707 million, indicating an increase of 9.6% from the figure reported in the year-ago quarter. MKC has a trailing four-quarter earnings surprise of 10.3%, on average.
The J. M. Smucker Company SJM currently has an Earnings ESP of +0.24% and a Zacks Rank #3. The company is expected to register a bottom-line decline when it reports third-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for its quarterly earnings has moved down by a penny to $2.07 per share in the past 30 days. The projection suggests a 15.5% slump from the year-ago quarter’s reported figure.
Smucker’s top line is expected to decline year over year. The consensus mark for revenues is pegged at $2,050 million, indicating a drop of 1.3% from the figure reported in the year-ago quarter. SJM has a trailing four-quarter earnings surprise of 10.8%, on average.
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