What's Cooking for Lamb Weston Stock Ahead of Q1 Earnings Release?

Lamb Weston Holdings, Inc. LW is likely to witness a top and bottom-line decline when it reports first-quarter fiscal 2026 earnings on Sept. 30. The Zacks Consensus Estimate for revenues is pegged at $1.61 billion, indicating a 2.5% drop from the prior-year quarter’s reported figure. 

The consensus mark for earnings has remained unchanged in the past 30 days at 54 cents per share, which suggests a 26% decrease from the figure reported in the year-ago quarter. LW has a trailing four-quarter earnings surprise of 6.8%, on average.

LW: Key Factors to Watch

One of the key headwinds likely to have affected the first-quarter performance is the competitive pricing environment across North America and international markets. On its fourth-quarter fiscal 2025 earnings release, management signaled that pricing investments would continue into fiscal 2026, with low-to-mid single-digit declines expected in the first half of the year. These trade and price concessions may support volumes but are likely to put pressure on gross margins. 

Soft traffic in the United States and the UK is also a concern, as despite momentum in customer wins, weak traffic trends can lower sales growth and limit pricing power.

Apart from this, cost inflation (though moderating in potatoes) continues to be an issue across other inputs, including labor, packaging, and ingredients such as oils and starches. Higher transportation and warehousing expenses, which increased in fiscal 2025 due to elevated inventories, could remain a drag if not fully offset by efficiency measures.

Lamb Weston’s restructuring and cost-saving efforts, including its “Focus to Win” plan, offer a pathway to stronger financial performance. Another supportive factor is Lamb Weston’s ability to leverage innovation and product quality to maintain customer loyalty.

Earnings Whispers for LW Stock

Our proven model doesn’t conclusively predict an earnings beat for Lamb Weston this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. 

Lamb Weston carries a Zacks Rank #3 and has an Earnings ESP of -8.36%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With the Favorable Combination

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.

The Chef's Warehouse CHEF currently has an Earnings ESP of +7.32% and a Zacks Rank of 1. The company is likely to register a jump in the top and bottom lines when it reports third-quarter 2025 numbers. The Zacks Consensus Estimate for The Chef's Warehouse’s quarterly revenues is pegged at $981.3 million, which suggests an increase of 5.4% from the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for the quarterly earnings per share stands at 41 cents, up 13.9% from the year-ago period. CHEF has a trailing four-quarter earnings surprise of 11.3%, on average.

Kraft Heinz Company KHC currently has an Earnings ESP of +0.44% and a Zacks Rank of 3. The company is likely to register a top and bottom-line decline when it reports third-quarter 2025 numbers. The Zacks Consensus Estimate for Kraft Heinz’s quarterly revenues is pegged at $6.27 billion, which calls for a decrease of 1.7% from the prior-year quarter.

The Zacks Consensus Estimate for Kraft Heinz’s quarterly earnings per share is pegged at 58 cents, indicating a 22.7% plunge from the year-ago period. KHC has a trailing four-quarter earnings surprise of 5.1%, on average.

Kimberly-Clark Corporation KMB currently has an Earnings ESP of +17.43% and a Zacks Rank of 3. The company is likely to register top and bottom-line declines when it reports third-quarter 2025 numbers. The Zacks Consensus Estimate for Kimberly-Clark’s quarterly revenues is pegged at $4.17 billion, which suggests a 15.9% decrease from the prior-year quarter. 

The Zacks Consensus Estimate for Kimberly-Clark’s quarterly earnings per share is pegged at $1.64, indicating a 10.4% fall from the year-ago period figure. KMB has a trailing four-quarter earnings surprise of 6.2%, on average.

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This article originally published on Zacks Investment Research (zacks.com).

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