An Idaho company was the biggest loser in Wall Street’s dive. Want to help? Eat more fries
A Boise-area company saw its share prices plummet on Wednesday for the second time this year. On Wall Street, it was the day’s biggest loser.
Shares of Lamb Weston Holdings Inc., the frozen potato giant, are now worth half what they were one year ago.
The company employs more than 1,000 people in Idaho, according to the Idaho Department of Labor. Its headquarters are near the intersection of Eagle Road and State Street in Eagle. Lamb Weston has two plants in Idaho, in Twin Falls and American Falls, that are supplied by area potato farmers.
Lamb Weston, whose stock trades on the New York Stock Exchange under the ticker symbol NW, saw its shares fall more than 28% after the company reported disappointing earnings for the fourth quarter of its 2024 fiscal year. That was the steepest loss in the S&P 500, Investopedia reported.
The company’s CEO said inflation has slowed restaurant traffic and demand for Lamb Weston’s products. Lamb Weston, which spun off from ConAgra Foods in 2017, is among the world’s largest french-fry makers. It counts McDonald’s as a leading customer.
Inflation hurts frozen-potato demand
“The operating environment has changed rapidly over the past 12 months as global restaurant traffic and frozen-potato demand softened due to menu-price inflation continuing to negatively affect global restaurant traffic,” CEO Tom Werner said in a news release.
And the downturn isn’t over yet, he warned: “We believe this supply-demand imbalance will persist through much, if not all, of fiscal 2025.”
Werner said the company would take steps to adjust, including “decisive measures on cost.” He did not say if those measures would include job cuts.
The stock closed at $56.42 on Wednesday, half the $112.69 recorded exactly one year ago.
Lamb Weston didn’t suffer alone on Wall Street this week. Wednesday was reportedly one of the worst days for securities in recent years, as the earnings season brought a raft of disappointing financial reports from Tesla, Alphabet and others. Yahoo Finance reported that Nasdaq fell more than 3.5% in its worst day since 2022.
Union pension fund sues in Boise
In recent years, Lamb Weston has invested the better part of $1 billion in new and upgraded manufacturing plants, including a french-fry plant in Richland, Washington. The business employs more than 3,000 people in the Tri-Cities area of Washington state.
Lamb Weston’s share prices previously fell 30% after the company disclosed problems with the implementation of its new software system in April.
Lamb Weston is the target of a shareholder lawsuit related to its share prices.
The Cleveland (Ohio) Bakers and Teamsters Pension sued on June 13 in federal district court in Boise. The case aims to represent the pension and other investors who bought stock in the between July 2023 and April 2024.
The lawsuit alleges Lamb Weston artificially inflated its share prices by obscuring issues it was having with the new enterprise system in various public statements and filings with the Securities and Exchange Commission.
Lamb Weston on Wednesday disclosed that its net sales for the quarter fell 5% to $1.6 billion. Net income and diluted earnings per share were both down 74%, to $129.6 million and 89 cents, respectively.
The quarter and the 2024 fiscal year ended June 30.
Idaho Statesman Business and Local Government Editor David Staats contributed.
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