Overview

Jefferies analyst Andy Barish, citing Placer data, reported that United States restaurant foot traffic weakened further in May. Quick‑service restaurant traffic declined about 250 basis points sequentially, with burger‑type restaurants down roughly 200 basis points, chicken‑focused outlets down about 520 basis points, while pizza traffic was essentially flat, up 25 basis points.

Traffic and Sales Metrics

Industry same‑store sales rose 30 basis points month‑over‑month to 1.8% in May. The modest sales gain was driven by higher average check sizes, which increased 70 basis points, partially offsetting the 30‑basis‑point traffic decline.

Lamb Weston Outlook

Lamb Weston’s fourth‑quarter weighted traffic fell approximately 396 basis points compared with the third quarter. The company had previously disclosed that quick‑service restaurant traffic in North America grew about 1% in the third quarter, marking the first increase since late fiscal year 2024. Jefferies projects that Lamb Weston’s implied traffic will be down in the low single‑digit percentage range year‑over‑year in the fourth quarter, yet the firm still forecasts solid North America volume growth supported by customer wins, retention, and an extra week of sales.

International markets remain challenging for Lamb Weston, especially in Europe. The firm responded by curtailing a production line in the Netherlands at the start of the fourth quarter and recently announced a facility closure. Additionally, the ongoing Middle East conflict adds volume risk, as the region accounts for a high single‑digit percentage of the company’s international segment volume.

Mizkan America Performance

Mizkan America’s fourth‑quarter traffic through April and May declined about 221 basis points versus the third quarter. Within this decline, Chick‑fil‑A traffic fell roughly 508 basis points, and YUM‑branded restaurant traffic softened by about 219 basis points.

Analyst Rating

Jefferies maintained a buy rating on Lamb Weston, setting a price target of $55 based on an implied multiple of roughly 10 times the company’s 24‑month forward EBITDA.