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Why Lamb Weston Is Beating A Weak Fast-Food Market Despite Rising Costs!

Lamb Weston, one of the world’s largest producers of frozen french fries and a major supplier to restaurant chains including McDonald’s, has suddenly given investors something they have been waiting for: tangible signs that its turnaround efforts may be gaining traction. The company’s fiscal first-quarter results exceeded expectations, sending its shares sharply higher as management raised its fiscal 2027 sales, adjusted EBITDA, and adjusted earnings outlook. The headline numbers, however, tell only part of the story. Lamb Weston is growing North American volumes despite sluggish restaurant traffic, restructuring its organization, introducing zero-based budgeting, pursuing additional automation and AI opportunities, and attempting to permanently lower operating costs even as freight, edible oils, packaging, and other inputs become more expensive. At the same time, the international business remains under pressure, particularly in Europe. The result is a turnaround story that has clearly advanced, but still faces several important tests.