What Happened?
Shares of potato products company Lamb Weston (NYSE: LW) jumped 3.7% in the afternoon session after the company reported better-than-expected third-quarter 2025 earnings and revenue, though its full-year outlook was mixed.
The frozen potato products maker announced adjusted earnings of 74 cents per share on revenue of $1.66 billion. These results surpassed Wall Street's expectations, which had forecasted earnings of 53 cents per share on revenue of $1.62 billion. The company also noted that a 6% increase in sales volume helped drive the positive results. However, the company's full-year outlook tempered some of the enthusiasm, with its guidance for both revenue and EBITDA (a measure of profit) falling slightly below analysts' estimates.
After the initial pop the shares cooled down to $57.76, up 3.7% from previous close.
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What Is The Market Telling Us
Lamb Weston’s shares are somewhat volatile and have had 12 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 4 days ago when the stock gained 4% on the news that the latest Personal Consumption Expenditures (PCE) report, a key inflation gauge, came in line with expectations.
The report indicated that prices rose 2.7% annually in August, a slight uptick from July but precisely what economists surveyed by Dow Jones had forecasted.
Additionally, "core" PCE, which strips out the more volatile food and energy sectors, saw a 2.9% year-over-year increase, also matching projections. The PCE index is a crucial metric for the Federal Reserve when it assesses the economic landscape for its interest rate decisions. Since the figures did not present any unexpected acceleration in inflation, investor concerns about the central bank taking a more aggressive stance were alleviated, leading to a broad-based rally that broke a three-session losing streak for the major indexes.
Lamb Weston is down 12.5% since the beginning of the year, and at $57.76 per share, it is trading 29.8% below its 52-week high of $82.32 from December 2024. Investors who bought $1,000 worth of Lamb Weston’s shares 5 years ago would now be looking at an investment worth $871.60.
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