Company: LW
Filing Date: 2025-08-07
Form Type: ARS
Source: 0001679273-25-000063
Chunk: 10

Company: Lamb Weston Holdings, Inc.
Filing Date: 2025-08-07
Form: ARS
Chunk 10
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 1A. Risk Factors” of this Form 10-K. 3

Competition The value-added frozen potato products industry in North America, Europe and other international markets is highly competitive. Competitors include large North American and European frozen potato product companies that compete globally, as well as local and regional companies. The international markets are highly fragmented with increased production capacity recently being added by local companies in emerging markets like Saudi Arabia and India. Significant competitors include Agristo NV, Aviko B.V., Cavendish Farms Corporation, Clarebout Potatoes NV, Farm Frites International B.V., J.R. Simplot Company, The Kraft Heinz Company, and McCain Foods Limited. Some of our competitors are larger and have substantially more financial, sales and marketing, and other resources than us. In addition, some local competitors are vertically integrated, which enables them to produce potato products at lower costs. We compete with producers of similar products on the basis of, among other things, customer service and support, value, product innovation, product quality, brand recognition and loyalty, price, and the ability to identify and satisfy customer and consumer preferences. The markets in which we operate are expected to remain highly competitive for the foreseeable future. See also “Item 1A. Risk Factors – Industry Risks – Increased competition may result in reduced sales or profits” of this Form 10-K for further discussion of the risks associated with competition in our industry. Seasonality Our inventory levels, net sales, segment adjusted EBITDA, and cash flows are affected by seasonality. In general, our segment adjusted EBITDA percentage tends to be highest in our fiscal third quarter, reflecting the cost benefits of freshly harvested potatoes. We typically harvest potatoes in the Pacific Northwest of the U.S. and Europe in July through October, which is primarily in our fiscal second quarter. While the quality of potatoes affects production efficiency, overall, freshly harvested potatoes process more efficiently in our production lines and are not subject to storage or secondary transport costs. We typically hold 50 to 60 days of finished goods inventory on a first-in-first-out basis, so the costs incurred from our fiscal second quarter harvest, which are generally favorable, will flow through our income statement in our fiscal third quarter. Inventory levels also tend to be higher in our fiscal third quarter, requiring more working capital at that time. In general, net sales and cash flows tend to be higher in our fiscal fourth quarter, reflecting customer and consumer buying patterns. The number of days of inventory on hand exceeded our typical levels the last