Lamb Weston announces new CEO as it continues to struggle financially

Michael J. Smith, Lamb Weston’s chief operating officer, will be the next top leader of the Idaho-based potato processor as it wrestles with decreased demand for its products.

The company saw declines and losses across its operations, with net sales declining by $131.2 million in the second quarter, an 8% drop versus the same quarter in 2023, according to Lamb Weston’s Q2 report. Demand is down across the North American and international markets and Lamb Weston is in the middle of a restructuring plan that included the closure of its plant in Connell as it works to cut costs.

Lamb Weston employees cut the ribbon in 2019 at their new 300,000-square-foot expansion that will allow the Hermiston plant to produce nearly 750 million pounds of frozen french fries annually. From left: Rick Martin, chief supply chain officer; Leslie Winker, longtime Hermiston plant employee; Neal Flyg, Hermiston plant manager; Tom Werner, president and chief executive officer; Wayne Claver, senior director of manufacturing; Carol Samoray, vertical start-up manager; and Brian Jackson, engineering manager. (Courtesy Lamb Weston)

“Our financial results in the second quarter were below our expectations,” said Tom Werner, then-president and CEO, in a release. “Higher-than-expected manufacturing costs and softer volumes accounted for the shortfall, while price/mix and operating expenses were broadly in line with our targets for the quarter.”

The company also has authorized putting another $250 million toward its share buyback authorization and a quarterly dividend of $0.37 per share of Lamb Weston common stock – a 1 cent increase – payable on Feb. 28 to stockholders.

Lamb Weston is one of the Tri-Cities’ largest employers, with 2,660 employees in Benton and Franklin counties, according to Tri-Cities Area Journal of Business’ Book of Lists data.

On the same day it released its latest financial report, Lamb Weston announced Smith’s appointment as the next president and CEO and becoming a member of the board on Jan. 3. Werner is stepping down as president and a member of Lamb Weston’s board of directors but will continue in an advisory role until Aug. 31.

Smith has worked for Lamb Weston for 17 years and W.G. Jurgensen, chairman of the board, said his understanding of the company and its operations was part of the reason he was selected.

“He will also bring a fresh perspective to the role along with a blend of strategic thinking and a laser focus on capturing current market and operational opportunities, as well as a deep appreciation for our employees, customers and partners,” Jurgensen said in a release.