Frozen foods supplier Lamb Weston cuts annual profit forecast on soft demand

Oct 1 (Reuters) - Lamb Weston on Tuesday cut its annual profit forecast as the frozen foods supplier lowered prices of its products in the international markets to gain market share amid softer demand and competition.

The Eagle, Idaho-based company also said it will reduce its global workforce by 4% and eliminate certain unfilled job positions to improve cash flow and drive cost efficiencies.

Shares of the company were down 3.5% in after-hours trading.

The company, which supplies potato sides and appetizers to chains such as McDonald's and Yum Brands, has been struggling with weak sales as consumers avoid dining out amid price hikes in restaurants and higher costs of living.

For the fiscal year 2025, Lamb Weston now expects earnings per share in the range of $2.70 to $3.15, down from a prior forecast of $4.35 to $4.85 per share.

"Restaurant traffic and frozen potato demand, relative to supply, continue to be soft, and we believe it will remain soft through the remainder of fiscal 2025," CEO Tom Werner said.

Revenue dropped for the second straight quarter to $1.65 billion for the three-month period ended Aug. 25, with volumes falling 4% from a year ago in North America.

Analysts had expected the company to report first-quarter revenue of $1.56 billion, according to LSEG data.

The company announced the permanent closure of its manufacturing facility in Connell, Washington, effective Tuesday.

Lamb Weston had raised its prices over 2023 and 2024 to soften the blow from lower sales.

However, it said in July that it would look at lowering the prices for some products to deal with the competition in international markets. (Reporting by Neil J Kanatt and Juveria Tabassum in Bengaluru; additional reporting by Harshita Mary Varghese; Editing by Shreya Biswas and Shailesh Kuber)