BOCA RATON, Fla., Aug. 02, 2024 (GLOBE NEWSWIRE) -- Saxena White P.A. has filed a securities fraud class action lawsuit (the “Class Action”) in the United States District Court for the District of Idaho against Lamb Weston Holdings, Inc. (“Lamb Weston” or the “Company”) (NYSE: LW) and certain of its executive officers (collectively, “Defendants”). The Class Action asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and U.S. Securities and Exchange Commission (“SEC”) Rule 10b-5 promulgated thereunder on behalf of all persons and entities that purchased Lamb Weston common stock between July 25, 2023 and July 23, 2024, inclusive (the “Class Period”), and were damaged thereby. The Class Action filed by Saxena White P.A. is captioned: West Palm Beach Firefighters’ Pension Fund v. Lamb Weston Holdings, Inc., et al., No. 24-cv-0350 (D. Idaho).
The Class Action complaint expands the class period and allegations asserted in a related action against Lamb Weston and certain of its executive officers captioned: Cleveland Bakers and Teamsters Pension Fund v. Lamb Weston Holdings, Inc., et al., No. 24-cv-282 (D. Idaho filed June 13, 2024) (the “Cleveland Bakers Action”). Specifically, the Class Action expands the class period pled from July 25, 2023 to April 3, 2024 in the Cleveland Bakers Action, to July 25, 2023 to July 23, 2024 in the Class Action, which alleges that Defendants made false and misleading statements about the implementation of the Company’s new Enterprise Resource Planning (“ERP”) software system and failed to disclose the risk of negative impacts from its unsuccessful implementation.
Pursuant to the notice published on June 13, 2024 in connection with the filing of the Cleveland Bakers Action, and as required by the Private Securities Litigation Reform Act of 1995 (PSLRA), investors wishing to serve as lead plaintiff are required to file a motion for appointment as lead plaintiff by no later than August 12, 2024. Saxena White’s filing of the Class Action does not alter the lead plaintiff deadline.
Based in Eagle, Idaho, Lamb Weston is a food processing company and one of the world’s largest producers of frozen potato products, including French fries, which the Company sells to fast-food restaurant chains such as McDonald’s. For years, Lamb Weston discussed the importance of transitioning to an updated ERP system. In 2019, for example, CEO Werner explained that implementing a new ERP system will “drive productivity and reduce costs by streamlining supply chain, commercial and back-office processes, while also improving our demand in operations planning across our global manufacturing footprint.” However, due to challenges emanating from the COVID-19 pandemic, the Company paused its work on transitioning to a new ERP system.
By the start of the Class Period, Lamb Weston announced that it had completed the design work for its new ERP system that would manage and integrate the most important parts of the Company’s business. By late November 2023, Lamb Weston had already transitioned some of its central systems to its new ERP infrastructure.
The Class Action alleges that, during the Class Period, the Defendants made materially false and/or misleading statements and failed to disclose material adverse facts about the Company’s business, operations, and prospects, including that: (1) ongoing problems associated with the Company’s ERP system were hindering its successful implementation; (2) despite knowing of such problems, Lamb Weston implemented an ERP system that was not ready to go live; (3) the risk of negative impacts from the unsuccessful implementation of the Company’s ERP system had already begun to materialize, including the risk of losing substantial market share; and (4) as a result of the above, Defendants’ positive statements about the Company’s business, operations, and prospects, including its financial guidance for 2024, were materially false and misleading and/or lacked a reasonable basis at all relevant times.
These failures, misrepresentations, and other undisclosed issues were revealed to the market through public disclosures in 2024. The truth began to emerge on April 4, 2024, when Lamb Weston issued a press release announcing its financial results for its fiscal third quarter of 2024, which ended on February 25, 2024. In the press release, the Company disclosed significant problems with the transition to its new ERP System. For sales volumes in the fiscal third quarter, the Company reported a 16% decline, with half of the “decline related to unfilled customer orders resulting from the Company’s transition to a new ERP system[.]” The Company also reported that it had slashed its financial guidance for full fiscal year 2024, including a $330 million reduction to its sales outlook. As a result of this news, the price of Lamb Weston common stock shares declined by $19.59 per share, or more than 19%, from a closing price of $101.12 per share on April 3, 2024, to a closing price of $81.53 per share on April 4, 2024, on extraordinary trading volume.
The truth was fully revealed to investors before the markets opened on July 24, 2024, when Lamb Weston issued a press release revealing disappointing results for its fiscal fourth quarter and full fiscal year 2024, which ended on May 26, 2024. Net sales suffered a reduction of $135 million due to impacts associated with the Company’s ERP transition, and sales volume dropped 10% year-over-year, with one-third of that attributed to “share losses and the impact of unfilled customer orders related to the ERP transition[.]” On this news, the price of Lamb Weston common stock shares fell more than 28%, from a closing price of $78.62 per share on July 23, 2024, to a closing price of $56.42 per share on July 24, 2024, on extraordinary trading volume.
If you purchased Lamb Weston common stock during the Class Period and were damaged thereby, you are a member of the “Class” and may be able to seek appointment as lead plaintiff. If you wish to apply to be lead plaintiff, a motion on your behalf must be filed with the U.S. District Court for the District of Idaho no later than August 12, 2024. The lead plaintiff is a court-appointed representative for absent members of the Class. You do not need to seek appointment as lead plaintiff to share in any Class recovery in the Class Action. If you are a Class member and there is a recovery for the Class, you can share in that recovery as an absent Class member.
You may contact Marco A. Dueñas (mduenas@saxenawhite.com), an attorney at Saxena White P.A., to discuss your rights regarding the appointment of lead plaintiff or your interest in the Class Action. You also may retain counsel of your choice to represent you in the Class Action. You may obtain a copy of the Complaint and inquire about actively joining the Class Action at www.saxenawhite.com.
Saxena White P.A., with offices in Florida, New York, California, and Delaware, is a leading national law firm focused on prosecuting securities class actions and other complex litigation on behalf of injured investors. Currently serving as lead counsel in numerous securities class actions nationwide, Saxena White has recovered billions of dollars on behalf of injured investors.
CONTACT INFORMATION
Marco A. Dueñas, Esq.
mduenas@saxenawhite.com
Saxena White P.A.
10 Bank Street, Suite 882
White Plains, New York 10606
Tel.: (914) 437-8551
Fax: (888) 631-3611
www.saxenawhite.com
