12:57 PM EDT, 07/24/2024 (MT Newswires) -- Lamb Weston ( LW ) guided for an annual decline in fiscal 2025 earnings on Wednesday after posting an unexpected decrease in revenue and below-forecast earnings for the fiscal fourth quarter amid challenging market dynamics.

The maker of frozen fries forecast per-share earnings in the $4.35 to $4.85 range, marking a decline from fiscal 2024's EPS of $4.98, which was down 28% year to year. Shares of Lamb Weston ( LW ) tumbled 27% in midday trade.

Fiscal 2025 is expected to be "another challenging year" with menu price inflation impacting restaurant traffic and eating into volumes, according to Chief Executive Tom Werner. The company is guiding for revenue in the range of $6.6 billion to $6.8 billion, implying an improvement from the $6.47 billion in sales it reported for fiscal 2024, but below the $6.81 billion consensus among analysts polled by Capital IQ.

"The operating environment has changed rapidly over the past twelve months as global restaurant traffic and frozen potato demand softened due to menu price inflation continuing to negatively affect global restaurant traffic," Werner said in a statement.

Lamb Weston ( LW ) expects the supply-demand imbalance to continue through most, if not all, of fiscal 2025, according to Werner. The company is making operating adjustments over the near term, including investments in price to reinvigorate volume growth, reining in costs, and boosting supply chain productivity, he said.

For the fourth quarter, revenue fell to $1.61 billion from $1.69 billion a year ago and missed the $1.71 billion average analyst estimate on Capital IQ. The food processing company's North American sales slid 4% to $1.11 billion while international revenue fell 7% to $498.7 million.

Adjusted EPS dropped to $0.78 for the three months ended May 26 from $1.29 the year earlier and was short of the Street's $1.26 view.

"We are disappointed by our fourth quarter performance," Werner said "Our price/mix results were below our expectations, while market share losses and a slowdown in restaurant traffic in the US and many of our key international markets were greater than we expected."

Price: 56.57, Change: -22.05, Percent Change: -28.05