Lamb Weston appoints six new directors, Bradley Alford to chair board

EAGLE, Idaho - Lamb Weston Holdings, Inc. (NYSE:LW), the frozen potato producer currently valued at $7.5 billion, announced Monday it has entered into a cooperation agreement with JANA Partners Management and Continental Grain Company that will reshape its board of directors. The company, which has consistently raised its dividend for eight consecutive years according to InvestingPro, is undertaking this transformation amid challenging market conditions, with its stock down nearly 35% over the past year.

The frozen potato producer will appoint six new directors to its board: Bradley Alford, Ruth Kimmelshue, Timothy McLevish, Scott Ostfeld, Lawrence Kurzius, and Paul Maass. Alford will serve as the new Chairman of the Board. This leadership restructuring comes as the company maintains solid fundamentals, with InvestingPro data showing liquid assets exceeding short-term obligations and a healthy current ratio of 1.35.

Four current directors - Charles Blixt, W.G. Jurgensen, Robert Niblock, and Maria Renna Sharpe - will step down. These changes will take effect by July 11, 2025, expanding the board from 11 to 13 members, with 12 being independent.

"We are pleased to have reached this Agreement with JANA and Continental Grain," said Mike Smith, President and CEO of Lamb Weston. "Following our constructive engagement with them and taking into account perspectives gleaned from discussions with additional stockholders, we are confident this outcome is in the best interests of the Company and all of our shareholders."

Ostfeld, Managing Partner and Portfolio Manager of JANA Partners, stated: "I look forward to working with the Board and management to improve performance and deliver shareholder value."

The agreement includes provisions for JANA and Continental Grain to support the board’s slate of directors at the company’s 2025 Annual Meeting of Stockholders.

Alford brings extensive experience, having served as a director for Perrigo and Avery Dennison Corporation, and previously as Chairman and CEO of Nestlé USA. The other new directors bring diverse backgrounds in food, agriculture, and consumer goods industries.

According to the press release statement, the changes come as Lamb Weston seeks to strengthen customer relationships and execute on strategic objectives. Based on InvestingPro’s analysis, the company appears undervalued at current levels, presenting a potential opportunity for investors. InvestingPro subscribers can access detailed valuation metrics and 6 additional ProTips, along with comprehensive research reports that provide deep insights into the company’s financial health and growth prospects.

In other recent news, Lamb Weston Holdings Inc. reported that its earnings outlook has been revised, with S&P Global Ratings adjusting the company’s outlook to negative from stable due to competitive pressures and a challenging operating environment. S&P affirmed Lamb Weston’s ’BB+’ issuer credit rating, noting that the company’s revenue is expected to decline by about 1% in fiscal 2025 to $6.4 billion. Meanwhile, Raymond James reduced its price target for Lamb Weston from $80.00 to $75.00, maintaining an Outperform rating, following the company’s recent earnings report that met expectations and stabilized fiscal year 2025 guidance.

BofA Securities also lowered its price target for Lamb Weston to $56.00 from $60.00, maintaining a Neutral rating, citing margin concerns and potential activist investor involvement. Similarly, Citi reduced its price target to $60.00 from $61.00, also maintaining a Neutral rating, due to ongoing volume pressures in the foodservice industry. Additionally, Lamb Weston announced the appointment of Benjamin Heselton as its new Chief Information Officer, tasked with spearheading the company’s global technology strategy.

The company is facing intensified competition, with industry capacity utilization declining and potential trade policy risks. Despite these challenges, Lamb Weston is actively exploring value enhancement and operational efficiency strategies, with the possibility of acquisition being considered as a faster route to value creation for shareholders. The company has also engaged Alix Partners to assist in evaluating cost savings opportunities.

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