You probably don’t think about Lamb Weston Holdings Inc when you're staring down a basket of hot, salty fries at a drive-thru. Most people don't. But if you’ve eaten a french fry in North America—or basically anywhere else on the planet—there is a massive chance it came from one of their plants.
They are the invisible backbone of the fast-food world.
Right now, the company is in a weird spot. It’s a mix of record-breaking volume and a stock price that looks like it tripped down a flight of stairs. While everyone else is obsessing over AI and tech startups, Lamb Weston is fighting a war in the potato trenches. It’s a story of ERP meltdowns, shifting consumer habits, and a massive bet on "Focus to Win" that’s currently playing out in real-time.
The Massive Scale Nobody Sees
Honestly, the sheer size of Lamb Weston Holdings Inc is hard to wrap your head around. They aren't just "a potato company." They are the largest producer of frozen potato products in North America. Globally? They sit comfortably at number two.
When you look at their footprint, you’re looking at over 100 countries. They have plants in the U.S., China, the Netherlands, and Argentina. If you want to know how the global economy is doing, don't look at the S&P 500—look at fry sales.
In their fiscal 2025 results, they pulled in $6.45 billion in net sales. Think about that. That is a staggering amount of frozen potatoes. But despite those big numbers, things have been... bumpy.
The ERP Disaster That Actually Happened
We have to talk about the software. In early 2024, the company transitioned to a new Enterprise Resource Planning (ERP) system. On paper, it was supposed to streamline everything. In reality? It was a nightmare.
The rollout caused massive fulfillment issues. They couldn't get the right fries to the right places at the right time. This wasn't just a minor glitch; it cost them hundreds of millions in lost sales and sent their stock tumbling. It’s a classic cautionary tale of what happens when a "boring" food company tries to modernize its digital backbone and misses.
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They spent much of 2025 just trying to win back the customers they lost during that transition. By the time they reported their Q3 2025 results, they had finally "replaced" that lost volume, but the scars on the balance sheet remained.
Why the Stock Is Stressing Everyone Out
If you look at the stock ticker LW, you’ll see a lot of red lately. On December 19, 2025, they dropped their Q2 2026 results. The numbers were a total mixed bag.
On one hand, volume was up 8%. That’s huge! People are eating fries. But on the other hand, their price/mix declined by that same 8%. Basically, they are moving more potatoes but making less money on each pound because they’re having to offer "price support" (discounts) to keep their big customers happy.
The McDonald's Connection
You can't talk about Lamb Weston Holdings Inc without talking about the Golden Arches. McDonald’s is their single biggest customer, accounting for roughly 15% of their total sales.
When McDonald’s struggles with restaurant traffic—which has been happening as people feel the pinch of inflation—Lamb Weston feels the heat immediately. In late 2025, restaurant traffic in the U.S. and UK was down low single digits. If people aren't going to the drive-thru, they aren't buying fries. It's a simple, brutal equation.
The "Focus to Win" Strategy
So, what is the plan? CEO Mike Smith and his team launched a program called Focus to Win. It sounds like corporate jargon, but the numbers behind it are real.
They are aiming for $250 million in savings by the end of fiscal 2027. To get there, they aren't being gentle. They’ve permanently closed a manufacturing facility in Connell, Washington, and just recently, in January 2026, they announced the closure of their Munro, Argentina plant.
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The idea is to consolidate. They are moving production to "state-of-the-art" facilities like the new one in Mar del Plata, Argentina. Newer machines mean less waste and more profit. They also cut about 4% of their global workforce. It’s a "lean and mean" approach to a commodity business.
A Quick Look at the Numbers (2025-2026)
To give you a sense of where things stand, here is the breakdown of their most recent guidance and performance:
- Fiscal 2026 Sales Target: $6.35 billion to $6.55 billion.
- Adjusted EBITDA: $1.0 billion to $1.2 billion.
- Dividend Increase: Even with the drama, they raised the dividend by 3% to $0.38 per share in late 2025.
- Stock Buybacks: They’ve been aggressively buying back their own shares—over $39 million worth in just one quarter.
What Most People Miss: The Global Shift
Everyone focuses on the U.S. market, but the real action for Lamb Weston Holdings Inc is shifting internationally. While North American sales were essentially flat in late 2025, their international segment grew.
They are seeing massive demand in Asia. People are developing a taste for Western-style fast food, and that means fries. They recently finished capacity expansions in China and the Netherlands to keep up.
However, it’s not all sunshine. Europe is seeing intense pricing competition. There’s a bit of a "potato glut" or overcapacity in the global market right now. When there are too many fries and not enough hungry mouths, the price drops. That’s why you see Lamb Weston’s margins being squeezed.
The "French Fry Deflation" Myth
There’s a common misconception that since food prices are up, Lamb Weston must be raking it in. Not exactly.
The company is actually facing low-single-digit inflation on labor, oil, and packaging. While raw potato costs have stabilized or even dropped slightly in some regions, the cost of the oil to fry them and the box to put them in hasn't.
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They are stuck in a "price war" where they have to help their restaurant partners (who are also struggling) while their own costs remain high. It’s a tightrope walk.
Is There a Turnaround in Sight?
The bulls will tell you that Lamb Weston Holdings Inc is incredibly undervalued. They have a dominant market share and an "infrastructure-like" role in the global food supply. People aren't going to stop eating fries anytime soon.
The bears will point to the 2.23 debt-to-equity ratio. That is a lot of leverage. If interest rates stay high and restaurant traffic continues to stall, that debt becomes a heavy anchor.
Honestly, it comes down to execution. Can they actually hit that $250 million savings target? If they can, and if they can stop the "pricing bleed" where they give away their margins to keep volume high, the stock could see a massive recovery.
Real-World Action Steps for Following LW
If you're watching this company, don't just look at the stock price. Look at the "ground truth" indicators:
- Track QSR Traffic: Watch the quarterly reports from McDonald's and Yum! Brands. If their traffic is up, Lamb Weston's volume will follow.
- Monitor the Crop: Keep an eye on potato harvest reports in the Pacific Northwest. Weather events there can swing the company’s raw material costs by millions in a single season.
- Check the Savings: Look for the "Focus to Win" updates in their next earnings call. If they miss their cost-saving milestones, the market will likely punish them again.
- International Mix: Watch for growth in the "International" segment. If North America stays flat, this is the only engine left for growth.
Lamb Weston is a massive, complex machine that essentially feeds the world’s craving for comfort food. They’ve had a rough couple of years with tech failures and shifting markets, but they are currently restructuring for a much leaner future. It’s not a "flashy" business, but it’s a vital one.
Key Data Points to Remember
- Ticker: NYSE: LW
- Headquarters: Eagle, Idaho
- Major Customer: McDonald's (15% of sales)
- Current Strategy: "Focus to Win" (targeting $250M in savings)
- Market Position: #1 in North America, #2 Globally
The company’s ability to stabilize its pricing power in 2026 will be the deciding factor for its recovery. For now, they are producing more than ever—they just need to figure out how to keep more of the profit from every bag.