Lamb Weston Holdings Inc Q2 2026 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Thomas Palmer - JPMorgan Chase & Co - Analyst : Good morning and thanks for the question. Bernardette --

Question: Thomas Palmer - JPMorgan Chase & Co - Analyst : You made a comment in the prepared remarks about rebalancing supply and demand. It it sounded like a temporary pullback in production is anticipated in Europe. In the US last year, there was a plant closure and lines curtailed. I'm just wondering, should we start thinking about similar actions in Europe coming into play, so something more substantial than maybe reducing shifts or are there other actions that can be taken to aid this rebalance? Thanks.

Question: Thomas Palmer - JPMorgan Chase & Co - Analyst : Okay. Thanks for that. And then, just as we think about understood the commentary, I guess, in Europe on on some of the pressures, but I did want to maybe focus on North America a bit. As we think about some of the, I guess, volume drivers in LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 19, 2025 / 3:00PM, LW.N - Q2 2026 Lamb Weston Holdings Inc Earnings Call the back half and some of the less investment in price relative to the first half, should we start to see in 3Q, for instance, more of a seasonal uptick in North America or there Items may be there to consider?

Question: Thomas Palmer - JPMorgan Chase & Co - Analyst : Understood. Thank you.

Question: Peter Galbo - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Hey, good morning, Mike and Bernadette. Thanks for the question. Mike, I maybe wanted to actually pick up on the International side. I believe in your in your prepared remarks, you walk through the dynamics in Europe and Latin America. I didn't hear -- and maybe I missed, but I didn't hear any commentary on Asia and, in particular, some of the Asia export markets. I think there's been a fair amount of trade press just around local competitors in the region not only getting more competitive in in home markets but in some of your export markets throughout Asia. So I would just love to to have an update from you there on what you're seeing real time and whether or not that competition has intensified since we spoke like three months ago.

Question: Peter Galbo - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Okay. Thanks, Mike for that. And Bernadette, I mean, I think the flat-to-down commentary on the second half gross margin. Does that hold for both quarters as well? If I look back at Lamb Weston -- the history of Lamb Weston as a public company, like third quarter gross margins have been down versus the second quarter, like twice than it was during COVID, so I don't even know if we count that. So just want to understand if that comment is very much a second half comment or if it also applies to the third quarter. Thanks very much.

Question: Peter Galbo - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Got it. Okay. Thanks very much.

Question: Matthew Smith - Stifel, Nicolaus & Company Inc - Analyst : Hi. Good morning and thanks for taking my question. Bernadette, the outlook calls for moderating price/mix drag in the second half in North America. A couple of follow-up questions there. In terms of pricing on this year's contracts, is that landing in line with the performance relative to last year? And if I go back to the initial guidance, price/mix is expected to moderate to a low single-digit headwind in North America. Is that still the right way to think about it? Or has the mix impact caused that moderation to maybe lessen a bit? Thank you.

Question: Matthew Smith - Stifel, Nicolaus & Company Inc - Analyst : Thanks, Bernadette. And so when we think about that mix head win, should we -- is that a drag on performance through really this time next year just given how the balance of the business has been performing?

Question: Matthew Smith - Stifel, Nicolaus & Company Inc - Analyst : Thank you. I'll pass it on.

Question: Robert Moskow - Cowen and Company LLC - Analyst : Hey. Thanks. I wanted to dig into the decision to reopen more of your capacity in North America. The wording was a little confusing in the prepared remarks. You said you did it because you -- because facilities are returning to more optimal levels versus the very high utilization rates recently experienced. So are you saying that utilization rates got too high in first quarter, you need to reopen more of your production lines in order to get them lower? And is there any kind of negative impact to your profitability as a result of that or not? And then secondly, how long do you think this will persist? Is this a permanent decision or not?

Question: Robert Moskow - Cowen and Company LLC - Analyst : Got it. And in terms of keeping these lines open, it's for the foreseeable future. There's -- it's not a temporary measure?

Question: Robert Moskow - Cowen and Company LLC - Analyst : Great. All right. Thank you.

Question: Alexia Howard - Sanford C Bernstein & Co LLC - Analyst : Good morning, everyone.

Question: Alexia Howard - Sanford C Bernstein & Co LLC - Analyst : Can I ask about how you're managing to improve execution through increased discipline, more accountability, and metrics? I know you talked about how -- when capacity utilization was very high in the last few years. It was very hard to get your arms around all of that, obviously, you've taken a little bit of a pause on capacity utilization. It's now ramping up again. But what can you manage and monitor now that you maybe couldn't do a couple of years ago? And how is that helping your ability to execute and keep everything flowing smoothly? Thank you, and I'll pass it on.

Question: Alexia Howard - Sanford C Bernstein & Co LLC - Analyst : Great, thank you very much. I'll pass it on.

Question: Max Gumport - Exane Bnp Paribas - Analyst : Hey. Great. Thanks for the question. Halfway through the year, half of the year you're left, I'm curious what scenarios you're seeing that could still push you to the lower half of your adjusted EBITDA (technical difficulty) asked differently, what prevents you today from raising the low end of the range? Thanks very much.

Question: Max Gumport - Exane Bnp Paribas - Analyst : Great. As a follow-up, I think, obviously, the shares are down meaningfully today. I think part of what's being reflected there is investor concern around if Lamb Weston is not able to raise the low end of the guidance today on EBITDA. What does that mean for '27? Right now, lower half of the range is more likely than the remainder in '26, then what does that imply for '27? Does it imply further EBITDA declines next year as well. Is there any commentary you can offer to push back against that just given how the shares are performing right now? Thanks very much.

Question: Max Gumport - Exane Bnp Paribas - Analyst : Thanks very much.

Question: Marc Torrente - Wells Fargo Securities LLC - Analyst : Hey. Good morning and thank you for the question. First, you called out visibility to volume growth in the back half with North America at or above the front half. Just want to get a sense of how much of that is driven by the 53rd week and how the underlying momentum is against tougher laps? And I guess what that could look like entering fiscal '27?

Question: Marc Torrente - Wells Fargo Securities LLC - Analyst : Okay. And then, yeah, on the traffic front, it continues to be soft. Are you seeing anything in November, December that suggests any improvement or deterioration? And what are your expectations for trends over, say, the next 12 months?

Question: Marc Torrente - Wells Fargo Securities LLC - Analyst : Great. Thank you.

Question: Carla Casella - JPMorgan Chase & Co - Analyst : Thanks for the question. I was just wondering, if you could give us a little more color in terms of where you think overall industry capacity for frozen stands and if it varies dramatically by country or region.

Question: Carla Casella - JPMorgan Chase & Co - Analyst : Okay. Great. I'm sorry. I missed part of the early part, but thank you so much for going over that again.

Question: William Reuter - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Hi. Good morning. You've made some comments today about focusing on execution, working with your partners. It sounds like in some instances, maybe you're paying penalties or having to accept pricing that is lower than would be fair based upon your prior missteps, maybe some of the ERP challenges. I guess, do you believe that this is the case? And do you believe that over time, as you continue to have high fill rates that you may be able to demand greater pricing from those customers?

Question: William Reuter - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Got it. That makes sense. And then with the stock down, you're still below your 3.5 times leverage target. How is this going to inform decisions on capital allocation and potential acceleration of share repurchases?

Question: William Reuter - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Great. Happy holidays. Thanks.