Upcoming AWS Coverage on Post Holdings
LONDON, UK / ACCESSWIRE / April 17, 2017 / Active Wall St. announces its post-earnings coverage on Lamb Weston Holdings, Inc. (NYSE: LW). The Company released its financial results for the third quarter fiscal 2017 (Q3 FY17) on April 06, 2017. The Eagle, Idaho-based Company's net sales for the reported quarter were up by 5% y-o-y, beating market consensus estimates. Register with us now for your free membership at: http://www.activewallst.com/register/.
One of Lamb Weston Holdings' competitors within the Food - Major Diversified space, Post Holdings, Inc. (NYSE: POST), is estimated to report earnings on May 04, 2017. AWS will be initiating a research report on Post Holdings following the release of its next earnings results.
Today, AWS is promoting its earnings coverage on LW; touching on POST. Get our free coverage by signing up to: http://www.activewallst.com/register/.
Earnings Reviewed
For the three months ended on February 26, 2017, Lamb Weston reported net sales of $768.5 million compared to $728.7 million in Q3 FY16. Net sales numbers for the reported quarter topped market expectations of $759.7 million. The Company stated that favorable product and customer mix, price/mix helped sales to increase by 4%. Volume growth, on the other hand, boosted sales growth by 1% as the Company continued to operate essentially at full capacity.
The supplier of frozen potato, sweet potato, appetizer, and vegetable products reported net income attributable to Lamb Weston of $84.2 million, or $0.57 per diluted share, compared to $107.4 million, or $0.71 per diluted share, in Q3 FY16. The Company's adjusted net income attributable to Lamb Weston for Q3 FY17 came in at $87.4 million, or $0.59 per diluted share, versus $94.5 million, or $0.62 per diluted share, reported in the prior year's same period. Meanwhile, Wall Street had expected the Company to report adjusted EPS attributable to Lamb Weston of $0.53 per diluted share.
Operating Metrics
Gross profit for Q3 FY17 stood at $207.0 million compared to $181.9 million in the previous year's comparable period. In Q3 FY17, Lamb Weston spent $61.8 million as selling, general, and administrative expenses compared to $54.6 million in Q3 FY16. The Company's income from operations grew 14% to $145.2 million in Q3 FY17 from $127.3 million in last year's same period. Furthermore, adjusted EBITDA including unconsolidated joint ventures in Q3 FY17 was $190.8 million, up 11% from $171.8 million in Q3 FY16.
Segment Performance
During Q3 FY17, Global segment's net sales came in at $391.6 million, up 3% from $381.4 million in the year ago comparable period. The segment's Q3 FY17 product contribution margin rose 9% to $93.2 million from $85.6 million in Q3 FY16.
Lamb Weston's Foodservice segment's net sales were $242.2 million in Q3 FY17 which was 10% higher than the last year's recorded net sales numbers of $219.9 million. During the reported quarter, segment product contribution margin surged 30% to $84.1 million from $64.8 million in Q3 FY16.
Retail segment contributed $99.7 million to the Company's total sales in Q3 FY17 compared to $98.5 million in Q3 FY16. The segment's operating profit came in relatively flat at $23.1 million in Q3 FY17 compared to $23.2 million in the prior year's same quarter.
Cash Flow & Balance Sheet
In thirty-nine weeks ended February 26, 2017, Lamb Weston generated $254.1 million as net cash from operations of continuing operations compared to $221.1 million in the year ago comparable period. The Company had cash and cash equivalents balance of $37.5 million as on February 26, 2017, compared to $36.4 million, at the close of books on May 29, 2016. Furthermore, the Company ended the quarter with long-term debt of $2.37 billion compared to $104.6 million as on May 29, 2016.
Dividend
In a separate press release on March 23, 2017, Lamb Weston's Board of Directors declared a quarterly dividend payment of $0.1875 per share. The dividend is payable on June 02, 2017, to stockholders of record at the close of business on April 30, 2017.
Spin-Off
On November 10, 2016, Lamb Weston announced that it has completed the previously announced spin-off from Conagra Brands Inc. (formerly ConAgra Foods Inc.) (NYSE: CAG). On the same day, the Company's stock began trading on the New York Stock Exchange under the ticker symbol "LW".
Outlook
Lamb Weston reaffirmed its guidance for full year FY17, with net sales growth expectation of mid-single digit. Adjusted EBITDA including unconsolidated joint ventures growth rate is anticipated to be in mid-teens. Furthermore, adjusted diluted EPS is forecasted to be in the range of $2.20 to $2.28.
Stock Performance
At the closing bell, on Thursday, April 13, 2017, Lamb Weston Holdings' stock marginally declined 0.69%, ending the trading session at $41.87. A total volume of 531.79 thousand shares were traded at the end of the day. In the last three months, shares of the Company have advanced 13.87%. Moreover, the stock gained 11.19% since the start of the year. The stock is trading at a PE ratio of 20.98 and has a dividend yield of 1.79%.
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