Lamb Weston Is Best Stock in the S&P 500 Today. Why the Potato Producer Is Soaring.

The maker of frozen potato products posted strong earnings and said it will cut 4% of its global workforce. (Dreamstime)

Lamb Weston Holdings was the top performer in the S&P 500 on Wednesday after the producer of frozen potato products reported better-than-expected quarterly earnings and announced it would be cutting jobs under a new cost-savings program.

Lamb Weston posted adjusted earnings of 87 cents a share for its fiscal fourth quarter, up from 78 cents last year and well above analysts’ consensus estimate of 63 cents. Net sales totaled $1.68 billion, compared to $1.61 billion in the prior year and the $1.59 billion Wall Street had anticipated.

Shares were soaring 20% on Wednesday, putting Lamb Weston on course for its largest daily percentage increase on record, according to Dow Jones Market Data.

The company got a boost from international customers in the fourth quarter. While sales in North America fell 1% from the prior year, international sales climbed 15%, overcoming slow global restaurant traffic.

French fries, one of the company’s core offerings, will be a winner as consumers face growing economic pressures, the company said. Moving into 2026, “customers and consumers will continue to prioritize french fries as a menu and at home item,” Lamb Weston wrote. The company expects sales to remain steady at between $6.35 billion and $6.55 billion in 2026, after totaling $6.45 billion in 2025.

On top of the strong earnings, management also announced layoffs of around 4% of the company’s global workforce, which includes the elimination of some unfilled positions. Lamb Weston had roughly 10,700 workers as of July 2024, 30% of whom were unionized, though it announced layoffs last October that reduced its workforce by 4%.

The cuts are part of a new strategic plan the company calls “Focus to Win,” which aims to deliver at least $250 million in annualized run-rate savings by the end of fiscal 2028.

The layoffs will begin Wednesday, a company spokesperson told Barron’s.

Write to Nate Wolf at nate.wolf@barrons.com