To The Moon

$Lamb Weston Holdings, Inc.(LW)$ $ConAgra(CAG)$ $The Kraft Heinz Company(KHC)$ 

🍟 Lamb Weston’s Wild Ride! 🍟

Kia ora Tiger traders,

Hold onto your fries, folks! Lamb Weston Holdings (NYSE: LW) just took a tumble like a potato rolling off the counter. Down 27.61%, now sizzling at $56.91. What gives?

Fun Fact:

🌏 Did you know Lamb Weston produces enough French fries annually to circle the globe? That's a whole lotta spuds!

Blast from the Past:

📅 Since 1950, Lamb Weston has been the go-to for frozen potato goodies. They've kept our fries crispy and our bellies happy for decades.

Analysts' Insights:

🕵️‍♂️ The latest plot twist? Lamb Weston has been slashing prices to compete with rivals like McCain and Simplot. This is a major plot twist from their premium pricing script. Our insider sources say they misjudged the impact of their price hikes earlier this year, leading to a fry-fiasco!

Trending Now:

📉 Their earnings report dropped like a hot potato, revealing that the volume declines were much worse than expected. The buzz? It’s not just their ERP (Enterprise Resource Planning) issues—competitors are coming in hot!

Quotable Moments:

- Potato Guru, Regional North American Potato Growers Association: “Lamb Weston’s attempts to win back lost share is like trying to put the toothpaste back in the tube. They underestimated the competition’s hunger for their business.”

- Fast Food Chain Procurement Wizard: “Lamb Weston is now throwing numbers at us that actually make sense, unlike before when they were off the charts. It's a potato price-off!”

CEO's Remarks:

Tom Werner, President and CEO of Lamb Weston, expressed disappointment in the company's fourth-quarter performance, attributing the shortfall to lower-than-expected price/mix results, market share losses, and a slowdown in restaurant traffic in the U.S. and key international markets. Additionally, the company faced losses related to a voluntary product withdrawal.

Werner also noted that the operating environment has rapidly changed over the past year, with global restaurant traffic and frozen potato demand softening. This has led to increased capacity in North America and Europe, creating a supply-demand imbalance that the company expects to persist throughout much of fiscal 2025. In response, Lamb Weston is making operating adjustments, including reinvigorating volume growth, targeted investments in price and trade support, and cost and supply chain productivity initiatives.

Despite the near-term challenges, Werner remains focused on executing long-term strategies and improving customer service, believing that the actions being taken will strengthen the company's portfolio and position it to continue creating value for stakeholders over the long term.

Financial Snapshot:

- GAAP net sales for fiscal 2024 increased by 21% to $6.468 billion, including $1.107 billion from acquisitions.

- Net income declined by 28% to $726 million, and diluted EPS fell by 28% to $4.98.

- On an adjusted basis, net income and EPS for the full year increased by 6% to $740 million and $5.08, respectively.

- The effective tax rate for the fourth quarter was 28.2%, compared to 12.6% in the prior year quarter.

Social Media Fry Frenzy:

- @PotatoLover123: “Lamb Weston’s stock drop is as crispy as their fries! Hope they bounce back soon. 🍟📉”

- @StockGuru101: “LW underestimated the fry market. Now they’re paying the price, literally. Keep an eye on those bids! #StockMarket #LW”

Fibonacci Levels:

📊 Let's dive into some Fibonacci retracement levels to watch:

- 23.6% - $66.42

- 38.2% - $70.84

- 50.0% - $73.94

- 61.8% - $77.04

- 76.4% - $81.46

These levels might act as potential resistance points as Lamb Weston tries to climb back up.

Competitors of Lamb Weston Holdings (LW)

Lamb Weston faces competition from several major players in the frozen potato and food service industry. Key competitors include:

1. Conagra Brands, Inc. (NYSE: CAG): 🍽️ Through its subsidiary, Conagra produces and markets a range of frozen potato products under various brand names, including Alexia.

2. Kraft Heinz Company (NASDAQ: KHC): 🧀 Known for its Ore-Ida brand, Kraft Heinz is a major player in the frozen potato market, offering products like French fries, tater tots, and hash browns.

3. S.A. (SWX: NESN);:🍴 Through its brand Herta, Nestlé competes in the frozen potato market in certain regions, adding to the competitive landscape.

How This Might Benefit Competitors

📈 Market Share Gains: Lamb Weston’s current challenges, including price adjustments and supply chain issues, provide an opportunity for competitors to capture market share. McCain Foods and Simplot, in particular, can leverage their existing relationships and competitive pricing strategies to attract customers who may be dissatisfied with Lamb Weston.

🤝 Strengthening Customer Relationships: Companies like Conagra and Kraft Heinz can strengthen their relationships with existing customers by emphasising stability and reliability in their supply chains. Highlighting these qualities can make their products more appealing compared to Lamb Weston, which is currently perceived as unstable.

🚀 Innovation and Product Development: With Lamb Weston focusing on corrective measures, competitors can invest in innovation and product development to offer new and improved products. This can attract both retail and food service customers looking for alternatives.

📣 Marketing and Branding Opportunities: Nestlé and Aviko can capitalise on Lamb Weston’s struggles by ramping up their marketing efforts. By promoting their products as high-quality and dependable, they can entice customers to switch brands.

💰 Pricing Strategies: Simplot and McCain can continue to offer competitive pricing to gain an edge over Lamb Weston. As Lamb Weston adjusts its pricing strategies, competitors can highlight their more stable pricing to attract price-sensitive customers.

Conclusion

Lamb Weston’s current difficulties open the door for competitors to strengthen their market positions, capture additional market share, and enhance customer relationships. By focusing on innovation, reliability, and strategic pricing, these competitors can benefit significantly from Lamb Weston’s challenges.

@TigerGPT What spicy strategies can Lamb Weston cook up? 🤔

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