11:16 AM EDT, 04/04/2024 (MT Newswires) -- Shares of Lamb Weston ( LW ) plunged intraday on Thursday after the food processor reported weaker-than-expected fiscal third-quarter results and lowered its full-year guidance amid soft retail traffic trends and an internal systems transition that impacted fulfillment.

Revenue rose to $1.46 billion for the three months ended Feb. 25 from $1.25 billion the year earlier but was short of the $1.65 billion average analyst estimate on Capital IQ. Adjusted earnings per share fell to $1.20 from $1.47 and missed the Street's view of $1.45. Lamb Weston's ( LW ) stock sank 17% in Thursday trade.

Sales in the North America segment dropped 12% to $947.5 million due largely to a transition to a new enterprise resource planning system. The transition reduced visibility into finished goods inventories at Lamb Weston ( LW ) distribution centers, impacting fulfillment rates and leading to an unfavorable product mix. Volume in North America declined 17%.

"This pressured sales volume and margin performance," Chief Executive Tom Werner said in a statement. "After implementing systems adjustments and modifying processes, we believe the impact is behind us as our order fulfillment rates have normalized."

In Lamb Weston's ( LW ) international segment, third-quarter sales rocketed 179% on an annual basis to $510.8 million, which included incremental sales from the consolidation of the company's Europe, Middle East and Africa operations.

For 2024, the maker of frozen potato products reduced its sales guidance to a range of $6.54 billion to $6.60 billion from a prior view of $6.8 billion to $7 billion. The updated outlook reflects the transition's impact on fulfillment rates as well as soft near-term restaurant traffic and retail trends in North America and other key international markets, according to Lamb Weston ( LW ).

The company lowered its non-GAAP EPS guide to a range of $5.50 to $5.65 from between $5.70 and $6.15 previously. The Capital IQ consensus is for revenue of $6.88 billion and normalized EPS of $5.97 for the ongoing fiscal year. In the current quarter, it sees sales of $1.69 billion to $1.75 billion, which implies year-over-year growth amid improved price and mix. Seven analysts were modeling for stronger revenue of $1.84 billion in the fiscal fourth quarter.

"As a result of the ERP transition's impact and soft near-term restaurant traffic trends, we have reduced our annual sales and earnings guidance for the year," Werner said. "We remain confident in the underlying performance of the business, the health of the global frozen potato category and our ability to deliver sustainable, profitable growth over the long term."

Price: 84.96, Change: -16.17, Percent Change: -15.99