KENNEWICK — One of the Mid-Columbia’s largest private employers saw its share prices plummet on Wednesday for the second time this year.
Shares of Lamb Weston Holdings Inc., the Idaho frozen potato giant with 3,000 employees in the greater Tri-Cities, are now worth half what they were one year ago.
It operates offices, research and manufacturing facilities in the greater Tri-Cities, where it is the fourth largest private employer, according to the Tri-Cities Development Council.
The latest plunge saw Lamb Weston shares (NYSE: LW) fall more than 28% after the company reported disappointing fourth quarter earnings.
It blamed slowing restaurant traffic and voluntary product withdrawals for contributing to broad declines, which echoed similar reports by Tesla Inc. and other tech leaders.
Tom Werner, president and CEO, said the company was “disappointed” and would take steps to balance supply and demand, hinting at cost-cutting measures to come.
He anticipates the issue will continue into 2025 as rising menu prices drive down restaurant traffic.
Lamb Weston, which spun off from ConAgra Foods in 2017, is among the world’s largest french-fry makers and counts McDonald’s as a leading customer.
In recent years, it has invested the better part of $1 billion in new and upgraded manufacturing plants, including a french-fry plant on Saint Street near the Richland Airport.
It’s unclear what it’s recent stock struggles could mean for further expansions and hiring.
Lamb Weston didn’t suffer alone on Wall Street this week.
Wednesday was reportedly one of the worst days for securities in recent years as earnings seasons brought a raft of disappointing financial reports from Tesla Inc., Alphabet and others.
Yahoo Finance reported the Nasdaq fell more than 3.5% in its worst day since 2022 after the news triggered a tech sell-off.
Even so, Lamb Weston’s 28% slide was striking: It was the day’s biggest loser.
Bausch Health Companies Inc. was second, at 23% and Tesla was fifth, at 12.3%, according to Yahoo Finance.
Recent struggles, lawsuit
Wednesday’s plunge continues a downturn for Lamb Weston that started this spring.
Lamb Weston’s share prices previously fell 30% after the company disclosed problems with the implementation of its new software system in April
The cumulative effect has halved its share price, which closed at $56.42 Wednesday, half the $112.69 recorded exactly one year ago.
Lamb Weston is the target of a class action shareholder lawsuit related to its share prices.
The Cleveland (Ohio) Bakers and Teamsters Pension filed suit June 13 in federal district court in Boise. The case aims to represent the pension and other investors who bought shares between July 2023 and April 2024.
The complaint alleges Lamb Weston artificially inflated its share prices by obscuring issues it was having with the new enterprise system in various public statements and filings with the Securities and Exchange Commission.
Lamb Weston disclosed net sales for the quarter fell 5% to $1.6 billion while net income and diluted earnings per share were both down 74%, to $129.6 million, and 89 cents, respectively, in its fourth quarter report.
The quarter and its fiscal year ended June 30.
