11 August 2021
'Most challenging operating environment'
FISCAL 2021 was the most challenging operating environment in the company’s history, according to Lamb Weston's President and CEO Tom Warner.
Announcing the company's fiscal fourth quarter and full year 2021 results and providing its outlook for fiscal 2022, Tom said: “We’re encouraged by the pace of recovery in U.S. restaurant traffic, especially at full-service restaurants, and continue to expect that overall US french fry demand will return to pre-pandemic levels around the end of calendar 2021. We also anticipate that demand in Europe and in our key export markets will steadily improve as vaccines become more widely available and vaccination rates increase in those markets.
French fry demand is more predictable than it was last year, he said, but the lingering effects of the pandemic and the sharp recovery of the broader economy in the US has disrupted supply chain operations across all industries.
"While we expect these disruptions to be transitory, we believe these challenges, along with notable input and transportation cost inflation and the impact of a tighter labor market, will continue to pressure our earnings in the near term," said Tom. "However, we expect these pressures will ease as we anticipate gradual improvements in our supply chain operations as global economic conditions continue to stabilize, and as we look to pass through rising costs."
“Having seen the resiliency of french fry demand during the pandemic, we remain confident in the long-term health and growth prospects for the global category, and are committed to supporting this growth and our customers by investing in new capacity.”