(Reuters) – Lamb Weston beat third-quarter revenue and profit estimates on Thursday, as the frozen potato products maker benefited from its cost cuts and regained sales it had lost last year during its transition to a new database.
Its shares rose about 8% in early trading. The company said it had hired consulting firm AlixPartners to help evaluate more opportunities for cost savings.
Lamb Weston is on track to deliver up to $450 million in total capital spending reductions by fiscal 2026 compared to fiscal 2024, CEO Mike Smith said in a statement.
The company said in October it would cut 4% of its workforce and slash costs to mitigate the impact of weak demand from restaurants for its frozen potato products with consumers reining in non-essential spending.
The Eagle, Idaho-based company regained sales it had lost last year as it moved to a new Enterprise Resource Planning (ERP) system, a software that helps businesses organize finance, inventory and human resources.
Lamb Weston posted quarterly sales of $1.52 billion, compared with analysts’ estimates of $1.49 billion, according to data compiled by LSEG.
On an adjusted basis, the company logged quarterly profit of $1.10 per share, compared with analysts’ estimates of 87 cents.
Lamb Weston also reaffirmed its annual sales and profit forecasts.
Activist investor Jana Partners, which owns over 5% of Lamb Weston’s shares, had been instrumental in naming insider Michael Smith as CEO in January.
The hedge fund has also pushed the company to put itself up for sale.
(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Sahal Muhammed)
