Food producer Lamb Weston has warned that ongoing conflict in the Middle East could weigh on its operations through increased cost volatility and reduced demand.
Executives said the company expects weaker international volumes in the second half of its fiscal year, partly due to disruption linked to the conflict.
The broader impact remains uncertain and will depend on the duration and intensity of the situation, according to CEO Mike Smith.
Key risks include volatility in commodities such as fuel and packaging, as well as potential disruptions to supply chains already affected by transport instability in the region.
The company is also facing demand challenges, with reduced consumer spending impacting foodservice and retail sales.
As a result, Lamb Weston has taken steps to adjust production, including a $33 million charge related to excess inventory and underutilised facilities. It has also closed its plant in Argentina and consolidated production in a newer facility, while scaling back output in Europe.
