Lamb Weston Stock (LW) Firmly Off Lows – “Focus to Win” Plan To Reduce Headcount By 4%

Lamb Weston stock (NYSE: LW) reversed off 52 week lows yesterday, moving up 16% on the day. This turnaround came as the firm delivered a solid Q4 earnings report, and announced a comprehensive cost savings program designed to bolster shareholder returns and improve operational efficiency.

The frozen potato giant outlined plans to reduce its global workforce by approximately 4%, a move expected to contribute significantly to the company's goal of achieving at least $250 million in annualized run-rate savings by the end of fiscal year 2028.

The restructuring also aims to generate $120 million in working capital improvements by the end of fiscal 2027.

The company anticipates incurring pre-tax charges of $70 million to $100 million related to the restructuring, primarily in fiscal 2026.

These charges include costs associated with severance packages, asset retirements, and contract terminations, as detailed in the company's recent earnings releases.

“Lamb Weston is taking aggressive and decisive actions to improve its focus and improve shareholder returns,” the company stated in its announcement. “The Lamb Weston Board is operating with a heightened sense of urgency to return Lamb Weston to profitable growth, and we believe that the actions announced today in our Focus to Win plan are a strong first step.”

Despite the upwards move on Wednesday, LW remains firmly red since the start of the year, with the stock down 13.40%. An earnings beat, and cost savings will typically go down well with markets, yet there will be further improvements needed in the periods ahead in order to maintain momentum.

This morning has seen an upside analyst target, with Wells Fargo raising mildly, from $65 from $66. The firm saw the guide issues by LW as being ‘soft', with expectations of upside delivery in periods ahead.