Lamb Weston Holdings, Inc.

Good, Dan. Welcome to the Lamb-Weston Third Quarter FY 2025 Earnings Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Ms. Debbie Hancock, Vice President of Investor Relations. Please go ahead, ma'am.

Thank you, Anna. Good morning, and thank you for joining us for Lamb-Weston's Third Quarter 2025 Earnings Call. I am Debbie Hancock, Lamb-Weston's Vice President of Investor Relations. Earlier today, we issued our press release and posted slides that we will use for our discussion today. You can find both on our website, lambweston.com. Please note that during our remarks, we will make forward-looking statements about the company's expected performance that are based on our current expectations. Actual results may differ materially due to the risks and uncertainties. Please refer to the cautionary statements and risk factors contained in our SEC filings for more details on our forward-looking statements. Some of today's remarks include non-GAAP financial measures. These non-GAAP financial measures should not be considered a replacement for and should be read together with our GAAP results. You can find the GAAP to non-GAAP reconciliations in our earnings release and the appendix to our presentation. Joining me today are Mike Smith, our President and CEO, and Bernadette Madrieta, our Chief Financial Officer. Let me now turn the call over to Mike.

Thank you, Debbie, and congratulations on your new role. Good morning, everyone. Thank you for joining us today. I am honored to be the CEO of Lamb Weston, a company with a long and proud track record of excellence in our industry. Throughout our history, Lamb Weston has been a leader in innovation, product quality, customer relationships, and operations. These are long-term strengths we will build upon to drive growth and shareholder value. I know this industry and this business. I recognize our recent challenges and understand our future risks and opportunities. To meet evolving industry dynamics, Lam Weston needs to change. This is where my focus has been since I took over as CEO three months ago and where it remains. Everything is on the table and we are moving with urgency. We are amplifying our efforts with customers and I have been personally meeting and hearing directly from them. We have engaged Alex Partners, a global advisory firm specializing in business optimization, to accelerate an end-to-end value creation plan. Not only are we focused on unlocking value, both in the near term and long term, but also on defining the right go-forward strategy. And the Lamb Weston team is talented and experienced. They are engaged and ready to embrace change. This notably includes our new head of global supply chain, who has already identified significant opportunities to win with our customers, reduce complexity and cost, as well as improve performance. We have over 30 projects underway this fiscal year and will deliver quick wins as part of a savings pipeline across multiple years. For example, in the logistics space, we are right-sizing the use of different transportation modes and optimizing rail car loading. We also see the need for better balancing our finished goods cold storage capacity and are executing a plan to exit surplus warehouse space. We are combining these projects with the value creation work as part of our enterprise-wide value creation program. These efforts will be on top of our previously announced restructuring plan, where we remain on track to deliver at least $55 million of pre-tax savings in fiscal 2025 and $85 million of pre-tax savings in fiscal 2026. Today I'll update you on our progress to date, how we are controlling what we can control in a challenging market, and what's ahead. On slide six, You'll see our third quarter performance reflects the hard work of the Lamb Weston team to regain business, grow volume, and lower expenses while operating in a challenging macroeconomic environment. Specifically in the third quarter, we grew volume 9%, rebuilding after the transition to a new ERP in the prior year, increased net sales 4%, and grew adjusted EBITDA 6%. Despite this, all indications are that the consumer remains stretched, concerned about the economy, and looking for value. We saw this in the second quarter, and the consumer uncertainty has only increased since then. Turning to slide seven, as we finished our contracting late last year, visibility into our sales improved. We continue to reshape contracts, balancing when they come due, improving our ability to price with changes in the market, and providing customers continuity with Lamb Weston. Our improved engagement is also enabling us to expand and retain our existing customers while also pursuing and winning new business. We are seeing success across channels. In Away From Home, we recently partnered with a large growing QSR that previously had been cutting their own fries, converting them to a frozen product. They'll be completing a national rollout of our product during the remainder of calendar 2025 and into early calendar 2026. In the in-home consumption space, we recently launched new private label products across the grocery and club channels that are off to a great start. We are working to build upon wins like these as we continue to identify new and growing customers to drive long-term sustainable growth in our business. Now turning to slide eight, along with improved customer relations, we are winning business because of our ability to innovate and meet our customers' evolving needs. In North America, we launched new battered and seasoned products as well as fridge-friendly fries and tots that can be held refrigerated up to seven days, expanding our addressable market by allowing us to sell to customers that may not have freezers. In our North America retail channel, we've expanded our licensed brand portfolio to include onion rings and cheesy potato bites. And internationally, we launched a reimagined classic fry, the three-sided Frenzy Fries, and are receiving very positive feedback and demand signals. While we do not anticipate a near-term improvement in demand environment, we are controlling what we can control. We are focusing on gaining share, driving growth with existing customers, winning new customers, and operating with excellence. Now shifting to slide nine, into the upcoming potato crop. In North America, contract negotiations for the 2025 crop are nearly complete. Overall, we expect a mid-single-digit percent decline in price in the aggregate and have largely secured the targeted number of acres across our primary growing regions. We contracted fewer acres given softer demand and higher inventory on hand. Planting is on schedule for the early potato varieties, and we expect planting for the main harvest to be completed by the end of April. In Europe, prices governed under fixed price contracts are currently in negotiations, and expected to be flat on average for the 2025 potato crop. Contract planning across the European growing regions will continue through the end of April, and we'll provide our typical update on the outlook for potato crops in North America and Europe when we issue our fourth quarter earnings in July. Finally, an update on capacity. As we discussed previously, we took steps to rationalize capacity earlier this fiscal year, closing our Connell Washington plant and curtailing additional lines across our network. These actions improved our capacity utilization. We are prepared to address changes in demand that require reducing or increasing production through line curtailments and restarts. But in the near term, we expect the demand patterns will impact factory absorption. Since last quarter, we have seen additional capacity announcements primarily outside the U.S. The industry has historically been rational in respect to supply and demand and has made the necessary adjustments over the long term to stay in balance. And while we cannot know if or when these plans will come online, and we believe some have been delayed, we will continue to focus on driving productivity while working to exceed our customers' expectations. We are committed to ensuring we have the right capacity in the right geographies to meet our customers' needs, while optimizing flexibility in our manufacturing footprint. As we execute our strategy, our board and management team continue to regularly engage with shareholders, and we appreciate constructive input that furthers our goal of creating sustainable long-term value and attractive returns for our investors. This includes several discussions among members of our board, Jana, and Continental Grain. I'll now turn the call over to Bernadette.