In Friday’s trading session, Lamb Weston Holdings Inc. (NYSE: LW) continued its uptrend that started way back in June 2019. The stock rallied on Friday, and on high volumes, following the release of strong Q2 results that beat analyst expectations.
In the quarter, the company reported an EPS of $0.95 representing an increase of 19% compared to a similar period in the last financial year. The company noted that, this was due to an increase in income from its operations, and gains of 4% from the BSW acquisition. Analysts were expecting an EPS of $0.85.
The company also noted that in the quarter, it had net sales of $1019.2 million. This represented an increase of 12% compared to a similar period in the last financial year. This was significantly higher than analyst expectations of $964.39 million. The company attributed this to an increase in volumes in its global and foodservice aspects of the business. It also noted that, more shipping days in relation to Thanksgiving also played a role in this growth.
On top of that, gross profits in the quarter rose by 14.5% to hit $285.1 million. It attributed this to high volumes, low transport costs and pricing. However, the company noted that there were challenges. One of them was higher manufacturing costs, due to maintenance and related costs. The company also noted that, gross profits were affected by increased input costs, and depreciation relating to its French fry operations in Oregon.
The company also noted that, SG&A expenses rose to $91.6 million, representing an increase of 22.1%. It attributed this to an increase in compensation expenses and investments related to marketing and other services.
Looking at its price action in the day, the stock rallied and traded between a low of $86.19 and a high of $94.46, before closing the day at $93.56. Volumes in the day stood at 3.94 million.
About Lamb Weston Holdings Inc.
Lamb Weston Holdings Inc. is a producer and a distributor of value-added potatoes globally. It is based in Eagle, Idaho.