Company: LW
Filing Date: 2025-04-03
Form Type: 10-Q
Source: 0001679273-25-000026
Chunk: 34

Company: Lamb Weston Holdings, Inc.
Filing Date: 2025-04-03
Form: 10-Q
Item: Part I, Item 1
Chunk 34
---
 additional capacity, primarily outside of the U.S. Against a backdrop of lower restaurant traffic and increasing manufacturing capacity, we have undertaken a thorough end-to-end review, including an engagement with AlixPartners, a leading global business advisory firm, to assist us in evaluating opportunities for near- and long-term value creation and cost savings, further building on our Restructuring Plan. 

Outlook

Looking forward to the fourth quarter of fiscal 2025, we expect sales volumes to be slightly higher than in the third quarter, primarily due to growth in our International segment. We expect costs per pound to increase in the fourth quarter. This reflects seasonal trends, particularly the third quarter benefit from seasonally lower costs as we transport and process direct from the field. We expect input and transportation and warehousing costs to remain high. In addition, we expect an increase in planned maintenance and curtailment-related downtime associated with our previously revised demand outlook will more than offset benefits from continued improvement in our global manufacturing operations.

On April 2, 2025, the U.S. announced a new universal baseline tariff of 10%, plus an additional country-specific tariff for select trading partners, on all U.S. imports. We are a global business that allows us to provide most of our customers with local/regional supply. The recently announced tariffs exempt imports that are compliant with the United States-Mexico-Canada trading agreement (“USMCA”), which includes french fries imported from Canada. As such, the products we manufacture at our one production facility in Canada and import to the U.S. are exempt from these tariffs. We source approximately 5 percent of our inputs from Canada, primarily edible oils and natural gas, which are also USMCA compliant and therefore, exempt from the recently announced tariffs.  We are evaluating our other expenditures to assess the impact of the recent tariff announcements, but do not currently expect them to have a significant impact on our fiscal 2025 financial results.  In addition, our U.S. manufacturing operations export in the mid- to high-teens as a percent of total volume and net sales, which could be subject to future retaliatory tariffs, if any. Given the timing and uncertainty of tariffs, including potential retaliatory tariffs, we have not included any impact from potential tariffs in our outlook above.  

Restructuring Plan

Our Restructuring Plan is designed to drive operational and cost efficiencies and improve cash flows. The Restructuring Plan includes the permanent closure of a manufacturing facility, the temporary curtailment of certain 

20