Company: LW
Filing Date: 2025-07-23
Form Type: 10-K
Source: 0001679273-25-000049
Chunk: 24

Company: Lamb Weston Holdings, Inc.
Filing Date: 2025-07-23
Form: 10-K
Item: Item 1
Chunk 24
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, 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 two fiscal years primarily due to lower sales volume compared to forecasted amounts. We have working capital initiatives underway to decrease inventories in line with historical levels.

Human Capital Resources

We believe that our employees and our workplace culture are among our most important assets, and that our employees are integral to our ability to achieve our strategic objectives. Attracting, developing, and retaining the best talent globally with the right skills to drive our mission, vision, and values are central components of our strategies for long-term growth. As of July 17, 2025, we had approximately 10,100 employees, of which approximately 3,100 employees work outside of the U.S. As of July 17, 2025, approximately 30% of our employees are parties to collective bargaining agreements with