July 24 (Reuters) - Lamb Weston ( LW ) forecast its

annual sales and profit below analysts' expectations on

Wednesday, as higher prices of its frozen food products begin to

hurt volumes, sending its shares plunging more than 20% in early

trading.

The company has been increasing prices of its products,

including ready-to-cook classic and sweet potato fries to offset

rising costs of manufacturing, transportation and inputs such as

potatoes.

Lamb Weston ( LW ), which supplies to fast-food chains such as

McDonald's and KFC ( YUM )-owner Yum Brands ( YUM ), also faced

pressure from more people opting to cook their meals at home

amid persistent inflation.

"Market share losses and a slowdown in restaurant traffic in

the U.S. and many of our key international markets were greater

than we expected. We also incurred losses related to a voluntary

product withdrawal," CEO Tom Werner said.

The company forecast 2025 net sales in the range of $6.6

billion to $6.8 billion, the mid-point of which was below LSEG

estimates of $6.79 billion.

It also expects full-year earnings per share to be between

$4.35 and $4.85, compared with analysts' average estimate of

$6.09.

The company said its volumes in the first half of the fiscal

2025 was likely to decline low-to-mid single-digits range.

Its volumes fell 8% in the fourth quarter.

Revenue of $1.61 billion in the quarter ended May 26 was

below analysts' estimate of $1.70 billion.

The company's adjusted earnings per share was at 78 cents

compared with the $1.26 estimated.