French Fry Giant Lamb Weston Reports Q2 Loss and Shakes Up Leadership

After Lamb Weston closed one of its plants and laid off over 370 workers in October, the french fry maker is reporting a substantial loss in the fiscal second quarter. The McDonald’s supplier lost just over $36 million, or 25 cents per share. In the same period last year, the company reported a $215 million profit, roughly $1.48 a share.

With such a poor quarter, Lamb Weston expects annual adjusted earnings between $3.05 and $3.20 a share, with a projected revenue of $6.35 billion to $6.45 billion. Previous forecasts had adjusted earnings between $4.15 and $4.35 a share and $6.6 billion to $6.8 billion in revenue.

Lamb Weston, the largest french fry maker in North America, has been affected by weakening demand in the fast-food segment. Consumers, looking to save money, have been cooking meals at home instead of spending on restaurant-prepared food. The trend has hurt both fast-food companies as well as the businesses that supply them.

Fast-food promotional meal deals also adversely affected the business. Consumers often chose a smaller portion of sides, like fries, which led to less volume for the supplier.

Lamb Weston Gets a New CEO

In an effort to potentially turn the company around, Lamb Weston has moved COO Michael Smith into the CEO position effective Jan. 3, 2025. Thomas Werner, the current CEO, will remain in an advisory position until August 2025.

“Mike’s appointment represents the culmination of a thoughtful, years-long succession planning process by our board, and we are confident he is the right leader to guide Lamb Weston forward,” said Chairman W.G. Jurgensen in a statement.

Smith was hired in 2007 and has held various positions since, including senior vice president and general manager of foodservice, retail, marketing, and innovation. He took the COO role in 2023.

Based in Eagle, Idaho, Lamb Weston supplies frozen french fry products to restaurants and other retailers in over 100 countries. Nearly 13% of Lamb Weston’s annual french fry sales come from one customer: McDonald’s.