Jacob Henry

Jacob Henry inquired about the pricing of contracts signed this quarter, asking how they aligned with expectations and if Lamb Weston is offering more discounts than anticipated to secure new business.

Answer

CEO Mike Smith stated that North America pricing was in line with expectations, reflecting customers' focus on service, quality, consistency, and innovation, not solely price, despite supporting customers in a challenging environment. He noted that international markets continue to experience more competitive dynamics due to new capital, raw pricing, and normal competition, but this was also as expected. CFO Bernadette Madarieta added that there's a mix shift in the retail channel towards private label volume.

Jacob Henry, on behalf of Rob Moskow, asked for additional details on the pricing of contracts signed this quarter, specifically how they aligned with expectations and if the company is resorting to more discounting than anticipated to win new business.

Answer

CEO Mike Smith stated that North American customers are focusing on service quality, consistency, and innovation, not solely on price, and pricing in North America has been in line with expectations. He acknowledged supporting customers in a challenging environment and noted that 75% of contracts are finalized, with the remaining 25% expected by calendar year-end. He added that international markets continue to exhibit more competitive dynamics due to new capital, raw pricing, and normal competitive pressures. CFO Bernadette Madarieta highlighted a mix change in North America, particularly in the retail channel, with a shift towards private label volume over branded volume.