11:16 AM EST, 12/19/2024 (MT Newswires) -- Shares of Lamb Weston ( LW ) plunged intraday Thursday after the supplier of frozen potato products reported disappointing fiscal second-quarter results and lowered its full-year guidance, while saying its chief executive will step down.

Revenue fell 8% year over year to $1.6 billion for the three months ended Nov. 24, below the $1.67 billion average analyst estimate on FactSet. Adjusted earnings per share declined to $0.66 from $1.45 and missed the Street's $1.01 forecast. Shares of Lamb Weston ( LW ) tumbled 21% in Thursday trade.

"Our financial results in the second quarter were below our expectations," CEO Tom Werner said in a statement. "Higher-than-expected manufacturing costs and softer volumes accounted for the shortfall."

Werner will be replaced by Chief Operating Officer Michael Smith, effective Jan. 3, the company announced separately on Thursday. Werner will continue to serve in an advisory role through Aug. 31 to aid the transition.

Sales in Lamb Weston's ( LW ) North America market dropped 8% to $1.07 billion while international sales were down 6%. Total volume declined 6% amid soft restaurant traffic trends across the globe, customer share losses and Lamb Weston's ( LW ) decision in the prior year to exit certain businesses in Europe, the company said.

Management lowered its fiscal 2025 sales guidance to between $6.35 billion and $6.45 billion from $6.6 billion to $6.8 billion previously expected, citing increased international competition and incremental volume pressure in North America. The FactSet consensus is for sales of $6.66 billion in the ongoing year.

The company cut its adjusted EPS target range to between $3.05 and $3.20 from $4.15 to $4.35. The analysts' view is for non-GAAP EPS of $4.17 this fiscal year.

"We expect challenging conditions to persist through the remainder of fiscal 2025 and into fiscal 2026, driven primarily by an accelerating rate of capacity additions and continued near-term softening of global frozen potato demand below historical rates, particularly outside North America, until demand trends improve and capacity expansion normalizes," Werner said.

In addition to the restructuring plan Lamb Weston ( LW ) announced in October, it is exploring additional opportunities to lower expenses, including manufacturing and supply chain costs, he said.

Price: 61.97, Change: -16.25, Percent Change: -20.77