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Tag: Lamb Weston Holdings Inc

  • Wall Street braces for a turbulent October with jobs report on deck next week

    Wall Street braces for a turbulent October with jobs report on deck next week

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  • Wall Street could be in for another good quarter after an exuberant start to the year, history shows

    Wall Street could be in for another good quarter after an exuberant start to the year, history shows

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  • Happy meal? Steady french fry demand is good news for U.S. economy

    Happy meal? Steady french fry demand is good news for U.S. economy

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    Image source: Jaromila | E+ | Getty Images

    Consumers are still splurging for a side of fries with their meals. That can have a positive read through for the economy.

    Frozen potato supplier Lamb Weston Holdings has seen the share of consumers ordering the iconic side with fast food meals — known as the fry attachment rate — remain above pre-pandemic levels, CEO Tom Werner told analysts on the company’s earnings call Thursday. That could indicate a resilient consumer even as inflation has pinched pocketbooks and fears of a recession have mounted.

    “The global frozen potato category continues to be solid with overall demand and supply balanced,” Werner said. “Fry attachment rate, which is the rate at which consumers order fries when visiting a restaurant or other food service outlets across our key markets have remained largely steady and above pre-pandemic levels.”

    When consumers feel financial pressure, a natural reaction is to cut back on spending through measures like trading down to cheaper brands or cutting extraneous expenses. In the case of Lamb Weston and fast food companies, that can manifest in the form of customers opting to skip fries or other sides in a bid to keep spending restricted.

    To be sure, the impact of inflation can impact the business in other ways outside of just fry sales. Lamb Weston saw little change in total traffic in key U.S. markets, but evidence of a shift in consumer behavior was there: Growth in quick-service food providers, which are typically more affordable, balanced out declines seen in full-service and casual-dining restaurants.

    Werner also said inflation can continue to drive up costs for the company, specifically related to potato contract prices.

    He pointed to June as a source of restaurant traffic weakness seen in the fiscal fourth quarter. But Werner said it has been reassuring to see trends approve since then, while remaining confident in the ability of the company’s potato offerings to weather an economic slowdown.

    “We suspect that restaurant traffic trends will be volatile in the near term as high interest rates, high inflation and uncertainty continues to affect consumer,” Werner said. “That said, frozen potato demand has proven resilient during the most challenging economic times, and we continue to be confident in the long-term growth prospect for the global category.”

    Lamb Weston stock jumped more than 9% in Thursday’s session. The stock has performed almost in line with the broader market in 2023, up almost 11% since the year began.

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  • U.S. stocks finish choppy session with losses, snap 2-day winning streak as investors assess positive economic data

    U.S. stocks finish choppy session with losses, snap 2-day winning streak as investors assess positive economic data

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    U.S. stock indexes ended modestly lower on Wednesday, despite briefly turning positive in the final hour of trading, while data showed steady growth in private-sector jobs and in the service sector, indicating more scope for the Federal Reserve to continue to raise interest rates.

    How stocks traded?
    • The Dow Jones Industrial Average
      DJIA,
      +0.03%
      lost 42.45 points, or 0.1%, to finish at 30,273.87

    • The S&P 500
      SPX,
      +0.21%
      was off 7.65 points, or 0.2%, ending at 3,783.28

    • The Nasdaq Composite
      COMP,
      +18.82%
      shed 27.77 points, or 0.2%, to end at 11,148.64

    On Tuesday, the Dow jumped 825 points, or 2.8%, while the S&P 500 increased 3.1% and the Nasdaq Composite rallied 3.3%.

    What drove markets?

    Wall Street stocks finished in the red after three main indexes bounced back from earlier losses in the final hour of trade, following a strong September private employment report in the morning.

    Data released Wednesday showed that private-sector payrolls rose by 208,000 in September, indicating steady growth and supporting the view that the Fed has enough scope to keep raising interest rates. Economists surveyed by The Wall Street Journal had expected a rise of 200,000.

    The report came two days before the closely watched nonfarm payrolls data issued by the Bureau of Labor Statistics. Investors are eying on it for important guidance on the Fed’s policy stance in the November meeting.

    Friday’s employment report is expected to show the economy added 275,000 jobs in September, compared with 315,000 new positions added in August, according to a survey polled by Dow Jones.

    See: Hiring and job creation seen falling to a 1 1/2-year low in U.S. September jobs report

    “That certainly could move the needle,” said Kristina Hooper, chief global market strategist at Invesco. “Again, it doesn’t mean that it actually is going to change the market, but it could be the catalyst for short term rally if we get a disappointing jobs report.”

    “But keep in mind, that’s just the anticipation of a Fed pivot based on data. But that does not ensure a Fed pivot. And so it could be one of those short-term rallies like the one we saw earlier this week,” Hooper said.

    In other data Wednesday, an ISM barometer of U.S. business conditions in the service sector dipped to 56.7% in September but still showed steady growth and rising employment in a sign the economy is still expanding.

    The U.S. trade deficit in August fell to $67.4 billion, the lowest level since mid 2021, paving the way for a resumption of growth in gross domestic product in the third quarter.

    See: Why investors shouldn’t expect a break from the stock-market whiplash, says this strategist

    The S&P 500 had just enjoyed its largest two day percentage gain since April 2020 on Monday and Tuesday, and the best start to a quarter since 1938, according to Dow Jones Market data.

    The bounce followed three quarters of declines, the worst such run since 2008, during which time the S&P 500 fell 24.8% to a near two-year trough as investors worried that the Federal Reserve’s interest rate hikes to crush inflation would harm the economy.

    Brian Mulberry, client portfolio manager at Zacks Investment Management, believes the volatility in the stocks will continue because markets are getting a very “consistent message” from the Fed.

    “Given what has happened over the last five trading sessions alone, we would be basically telling our clients to tighten your seatbelt a little bit because it’s definitely going to continue to be a bumpy ride,” Mulberry told MarketWatch in a phone interview on Wednesday. “If we get a ‘Goldilocks’ (jobs) report, that would mean decent economic activity is going on. That’s good for earnings overall in the market, but it’s not growing to a point where interest rates would have to be ratcheted up another 125 basis points by the end of the year.”

    See: The stock market is surging as the U.S. dollar retreats. It’s all about bonds.

    One major reason behind the rise early this week was the view that the Fed would pivot away from its aggressive monetary tightening.

    Johanna Chua, chief Asia economist at Citi, said that though U.S economic growth remained in better shape than other countries and Fed officials continued to sound hawkish, the market risked being wrongfooted by any signs that interest rates could soon peak.

    “Even as the overall fundamental setup has not changed… trimming of bearish risk/bearish rates/bullish USD positions has driven a sharp reversal,” Chua said.

    Mary Daly, president of the Federal Reserve Bank of San Francisco said Wednesday that the Federal Reserve needs to keep raising its benchmark interest rate in order to cool inflation that hit a 40-year high earlier this year and has shown little signs of cooling. Atlanta Fed President Raphael Bostic will speak at 4 p.m. Eastern.

    Meanwhile, the OPEC+ group said Wednesday that it will reduce its collective crude production levels by 2 million barrels a day starting next month, the biggest cut since the start of the pandemic. Oil futures headed higher with West Texas Intermediate crude for November delivery
    CL00,

     
    CLX22,

    rose $1.24, or 1.4%, to settle at $87.76 a barrel on the New York Mercantile Exchange.

    The S&P 500’s energy sector
    SP500.10,
    -0.07%
    rose 2.1% following the news, up 12.6% over the last three trading days. According to Dow Jones Market Data, it was the best three-day percentage gain since November 2020 when it gained 16.1%. Shares of Schlumberger 
    SLB,
    +0.77%
    gained 6.3% at the close, while Exxon Mobil
    XOM,
    +1.32%
    shares advanced 4%.

    Companies in focus
    • Shares of Helen of Troy Ltd. 
      HELE,
      -2.75%
      finished 3.4% higher Wednesday, after the consumer products company, with brands including OXO, Hydro Flask and Braun, reported fiscal second-quarter earnings that beat expectations but cut its full-year outlook, as rising inflation has prompted consumers to change their spending patterns.

    • Shares of Monopar Therapeutics Inc.
      MNPR,
      +6.36%
       gained 1.8% after the company said it completed enrollment in a Phase 2b clinical trial evaluating its experimental therapy aimed at preventing severe oral mucositis in patients undergoing chemoradiotherapy for oropharyngeal cancer.

    • Shares of Eiger BioPharmaceuticals Inc.
      EIGR,
      +0.85%
       tumbled 5% after the company said it will not pursue emergency authorization of its experimental treatment for mild and moderate COVID-19 infections.

    • Shares of Lamb Weston Holdings Inc.
      LW,
      +2.45%
       ended 4.2% higher Wednesday, after the potato supplier reported fiscal first-quarter profit that beat expectations, higher prices helped offset a volume decline.

    —Jamie Chisholm contributed reporting

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  • Cramer’s week ahead: 3 events will determine if the market’s bad momentum will continue in October

    Cramer’s week ahead: 3 events will determine if the market’s bad momentum will continue in October

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    CNBC’s Jim Cramer on Friday said that three key events next week will determine if the nightmarish month for the stock market will continue into October.

    Here are the events:

    • The release of the nonfarm labor report Friday. Cramer said he expects it to show inflated hiring and wages.
    • Two speaking engagements by Cleveland Fed President Loretta Mester, who Cramer believes is the primary inflation hawk on the Federal Open Market Committee. “She wants to protect us … from high inflation, even if that means raising interest rates into a recession,” he said.

    The S&P 500 closed out its worst month since March 2020 on Friday. The Dow Jones Industrial Average and the Nasdaq Composite fell 8.8% and 10.5%, respectively, for the month.

    While it’s likely that Mester and the report will both bring bad news, investors can protect themselves from the market wreckage if they stick to a solid game plan, according to Cramer. 

    “Own high-quality companies with good balance sheets and high dividends that will benefit from a decline in inflation, because that’s what’s going to happen,” he said.

    He also previewed next week’s slate of earnings. All earnings and revenue estimates are courtesy of FactSet.

    Wednesday: Helen of Troy, Lamb Wesson

    Helen of Troy

    • Q2 2023 earnings release before the bell; conference call at 9 a.m. ET
    • Projected EPS: $2.21
    • Projected revenue: $521 million

    Lamb Weston Holdings

    • Q1 2023 earnings release at 8:30 a.m. ET; conference call at 10 a.m. ET
    • Projected EPS: 79 cents
    • Projected revenue: $1.21 billion

    “We saw this from Nike last night — all that happens is the downside gets accentuated as the upside just treads water or goes marginally higher. That’s what I expect will happen with both when they report,” Cramer said.

    Thursday: Constellation Brands, Conagra Brands, McCormick, Norwegian Cruise Line Holdings

    Constellation Brands

    • Q2 2023 earnings release at 7:30 a.m. ET; conference call at 10:30 a.m. ET
    • Projected EPS: $2.81
    • Projected revenue: $2.51 billion

    He said he expects the company’s top line to be “extraordinarily good.”

    Conagra Brands

    • Q1 2023 earnings release at 7:30 a.m. ET; conference call at 9:30 a.m. ET
    • Projected EPS: 52 cents
    • Projected revenue: $2.85 billion

    The company needs to grow its business, according to Cramer.

    McCormick

    • Q3 2022 earnings release at 6:30 a.m. ET; conference call at 8 a.m. ET
    • Projected EPS: 71 cents
    • Projected revenue: $1.6 billion

    Cramer said that the company’s earnings call will simply reinforce its preannounced weaker-than-expected third-quarter earnings and full-year outlook cut earlier this month.

    Norwegian Cruise Line

    • Investor meeting at 10 a.m. ET

    Cramer said that he expects Norwegian to be performing better than competitor Carnival, which struggled with higher costs in its latest quarter, but it’s unclear whether that will be enough to help Norwegian’s stock.

    Friday: Tilray Brands

    • Q1 2023 earnings release at 7 a.m. ET; conference call at 8:30 a.m. ET
    • Projected loss: loss of 5 cents per share
    • Projected revenue: $169 million

    He predicted that the company will make a “bold” statement about the legalization of cannabis and said he’s pondering whether this could be a great speculative stock to own during the Biden administration.

    Disclosure: Cramer’s Charitable Trust owns shares of Constellation Brands.

    Cramer's game plan for the trading week of Oct. 3

    Jim Cramer’s Guide to Investing

    Click here to download Jim Cramer’s Guide to Investing at no cost to help you build long-term wealth and invest smarter.

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