Lower profit margins expected for Lamb Weston


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Lower profit margins expected for Lamb Weston

Lamb Weston Holdings' gross profit margins for 2022 are likely to remain below pre-pandemic levels according to its President and CEO, Tom Werner.

In announcing the company's fiscal first quarter 2022 results, Tom said: “Our first quarter sales results reflect the ongoing broad recovery within the frozen potato category, with overall demand in North America near pre-pandemic levels, and our shipments improving in each of our core restaurant and foodservice sales channels.” 

He went on to add: "The impact of extreme summer heat that negatively affected potato crops in the Pacific Northwest, combined with industrywide operational challenges, including highly inflationary input and transportation costs, labour availability, and upstream and downstream supply chain disruptions, will result in higher costs as the year progresses, and significantly pressure our earnings. Accordingly, we expect our gross profit margins to remain below pre-pandemic levels through fiscal 2022.”

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His team are approaching the challenges by executing pricing actions to offset commodity inflation, restructuring freight policies, modifying production and crewing schedules to reduce labor volatility, adopting new policies and practices to attract and retain manufacturing employees, and rationalizing our product portfolio, he said.

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