Lamb Weston Says U.S. Shipments For First 4 Weeks Of Q3 At 85% Of Prior-year Levels
While reporting its financial results for the second quarter on Thursday, Lamb Weston Holdings, Inc. (LW) provided a business update for the third quarter of fiscal 2021.
Lamb Weston noted that its U.S. shipments for the first four weeks of the third quarter through December 27, 2020 were about 85 percent of prior-year levels.
Shipments to large chain restaurant customers, which are composed of QSR and large full-service chain restaurants, were more than 95 percent of prior-year levels. The company, which records shipments to these customers in its Global segment, expects this rate will largely continue for the remainder of the fiscal third quarter.
Shipments by the Company’s joint venture, Lamb-Weston/Meijer v.o.f. or LWM, were about 85 percent of prior-year levels.
Demand softened during the latter half of the fiscal second quarter, due to the negative impact on restaurant traffic at full-service restaurants as governments reimposed social restrictions. The softened demand also reflects reduced outdoor dining due to the onset of colder weather.
Lamb Weston believes these factors will further negatively impact shipments during the third quarter.
Further, the company expects it will continue to incur additional costs due to the pandemic’s impact on its operations, at least through the remainder of fiscal 2021.
These costs may include, among others, costs to shut down, sanitize, and restart production facilities after a production employee has been infected by the virus; production inefficiencies and labor retention costs, reducing run-times, and lower overall factory utilization.
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