(Reuters) - Lamb Weston Holdings (NYSE:LW) raised its full-year net sales and profit forecasts on Thursday, banking on higher prices for its ready-to-cook frozen potato appetizers and easing cost pressures, sending its shares up 10%.
Lamb Weston, which supplies fast food giant McDonald's (NYSE:MCD), has hiked product prices over the past year to shield margins and is seeing input costs easing from their peaks.
The Idaho-based company's overall average selling prices rose 23% while volumes declined 8%, mostly due to the company exiting some lower-priced and lower-margin businesses and destocking by retailers mainly in the Asia-Pacific region.
The company said it expects full-year 2024 net sales between $6.8 billion and $7.0 billion, compared to the previous forecast of $6.7 billion to $6.9 billion.
The strong forecast mirrors comments from packaged food peer Conagra Brands (NYSE:CAG), which also topped first-quarter profit estimates on Thursday on the back of price increases.
Lamb Weston expects earnings per share to be between $5.47 and $5.92 for the full-year 2024, compared with its previous forecast of $4.95 to $5.40.
Excluding items, the fast-food chain earned $1.63 per share, beating the average analyst estimate of $1.08 per share.