Shares of Lamb Weston Holdings Inc.
LW,
+0.40%
sold off 3.0% in premarket trading Wednesday, after the frozen potato products seller reported fiscal third-quarter sales that came in well above forecasts but profit that fell below expectations, as COVID-19-related disruptions to manufacturing and distribution operations led to higher costs. Net income for the quarter to Feb. 28 declined to $66.1 million, or 45 cents a share, from $111.4 million, or 76 cents a share. Excluding nonrecurring items, adjusted earnings per share fell 42% to 45 cents, below the FactSet consensus of 51 cents. Sales declined 4% to $895.8 million, beating the FactSet consensus of $816.5 million, as foodservice revenue fell 22% to $219.5 million while retail revenue rose 23% to $162.5 million. Volume was down 6%, due primarily to lower demand from frozen potato products outside the home given government-imposed restrictions on restaurants and other foodservice operations as a result of the COVID-19 pandemic. The rate of volume decline improved from the 14% drop in the first half of fiscal 2021. Price and mix increased 2%. For the first four weeks fo the fiscal fourth quarterly, U.S. shipments were about 90% of levels seen in the fiscal fourth quarter of 2019. The stock has gained 2.8% year to date through Tuesday, while the S&P 500
SPX,
-0.10%
has advanced 8.5%.
