Buckle up, investors! Lamb Weston Holdings, Inc. (LW) is on the cusp of unveiling its third-quarter fiscal 2024 earnings on April 4. Speculation is rife about what these upcoming financials might reveal. The Zacks Consensus Estimate for revenues is perched at a hefty $1.64 billion, indicating a tantalizing 30.9% surge from the lukewarm figures of the prior-year quarter.
While the consensus mark for quarterly earnings has dipped by a barely noticeable penny in the last week to rest at $1.40 per share. This implies a slight retreat of 2.1% from the previous year’s quarter earnings. It’s worth noting that LW has a track record of surprising earnings over the last four quarters, with an average surprise of 28.8%.
The Influential Elements in Play
Lamb Weston’s sails have undoubtedly caught the wind in the form of advantageous pricing dynamics and robust operational momentum. A vivacious pricing strategy is expected to continue bolstering its top-line trajectory. Projections anticipate net sales (minus acquisitions) to leap by a robust 6.5-8.5% in fiscal 2024, driven by a substantial uptick of low-double-digit percentages in price/mix. This quarter, the price/mix is anticipated to leap by a commendable 9.7%.
Lamb Weston’s Strategic Focus and Growth Trajectory
A relentless focus on enhancing supply chain productivity, expanding globally, fortifying manufacturing and system capabilities, and enriching product offerings and customer mix has acted as pivotal growth accelerators for Lamb Weston. These strides have not only fortified the company’s offerings but also empowered it to deftly respond to the escalating demand for snacks and fries. These positive indicators bode well for the imminent quarter.
However, apprehensions loom in the form of volume concerns stemming from a restrained consumer outlook. Forecasts suggest a possible mid-single-digit percentage drop in volumes for fiscal 2024, echoing concerns also for the third quarter. Projections reveal a projected mollification of the gross margin by 190-basis points to settle at 29.8%.
Insights from the Zacks Model
The renowned Zacks model, the oracle of Wall Street, does not decisively hint at a potential earnings beat for Lamb Weston in the upcoming release. The magic formula combining a favorable Earnings ESP with a Zacks Rank of #1 (Strong Buy), 2 (Buy), or 3 (Hold) does not quite align with the current scenario for the company.
Presently, Lamb Weston sports an abysmal Earnings ESP of -1.07% and carries a discouraging Zacks Rank #4 (Sell). This mismatch raises a cautionary flag for investors. For more personalized insights, investors can explore the Earnings ESP Filter.
Looking Beyond Lamb Weston: Companies Poised for Earnings Triumph
As we gaze beyond the horizon of the frying pan, three other companies catch our eye for their favorable potential to beat earnings forecasts this season.
The Hershey Company is one such contender. With an Earnings ESP of +0.72% and a Zacks Rank of #3, Hershey holds promise for reporting robust top-line growth in the upcoming quarter. Market whispers suggest a 4.3% revenue spike, with analysts pegging quarterly revenues at a tantalizing $3.12 billion.
Another player worth noting is Church & Dwight Co. With a candid Earnings ESP of +1.32% and a Zacks Rank of 3, the company is poised to post growth in both its top and bottom lines in the first quarter of 2024. Projections see a 4.3% revenue hike, with quarterly earnings expected to rise by 1.2% over the year-ago quarter.
Last but not least is Newell Brands Inc. Amidst expectations of a top-and-bottom-line dip, the company remains an interesting contender. Market consensus points to a 16.7% YoY decrease in bottom-line results, with a 8.9% drop in quarterly revenues.
Are you curious to discover more about the upcoming earning announcements from these companies? Dive into the intriguing world of earnings calendars with Zacks.
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