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SEGMENTS
9 Months Ended
Feb. 23, 2020
SEGMENTS  
SEGMENTS

15.    SEGMENTS

We have four operating segments, each of which is a reportable segment: Global, Foodservice, Retail, and Other. Our chief operating decision maker receives periodic management reports under this structure that generally focus on the nature and scope of our customers’ businesses, which enables operating decisions, performance assessment, and resource allocation decisions at the segment level. The reportable segments are each managed by a general manager and supported by a cross functional team assigned to support the segment.

Thirteen Weeks Ended

Thirty-Nine Weeks Ended

    

February 23,

    

February 24,

    

February 23,

    

February 24,

(in millions)

2020

2019

2020

2019

Net sales

 

  

 

  

 

  

 

  

Global

$

487.1

$

498.2

$

1,544.3

$

1,434.9

Foodservice

 

283.0

 

265.5

 

893.3

 

843.0

Retail

 

132.2

 

129.0

 

393.6

 

369.1

Other

35.0

34.1

114.3

106.1

Total net sales

937.3

926.8

2,945.5

2,753.1

Product contribution margin (a)

  

  

  

  

Global

109.3

128.8

341.0

335.6

Foodservice

99.8

94.8

313.5

294.2

Retail

28.8

29.1

86.2

77.8

Other (b)

5.9

11.8

26.0

24.0

243.8

264.5

766.7

731.6

Advertising and promotion expenses (a)

6.6

8.9

17.4

21.4

Gross profit

250.4

273.4

784.1

753.0

Selling, general and administrative expenses

87.9

79.6

258.1

232.6

Income from operations

162.5

193.8

526.0

520.4

Interest expense, net

25.2

27.0

78.8

80.0

Income tax expense

35.7

39.6

115.1

107.9

Equity method investment earnings (c)

9.8

14.2

35.4

44.3

Net income

111.4

141.4

367.5

376.8

Less: Income attributable to noncontrolling interests (d)

 

 

 

 

8.6

Net income attributable to Lamb Weston Holdings, Inc.

$

111.4

$

141.4

$

367.5

$

368.2

(a)Product contribution margin represents net sales less cost of sales and advertising and promotion expenses. Product contribution margin includes advertising and promotion expenses because the amounts are directly associated with segment performance; it excludes general corporate expenses and interest expense because management believes these amounts are not directly associated with segment performance.

(b)The Other segment primarily includes our vegetable and dairy businesses and unrealized mark-to-market adjustments associated with commodity hedging contracts.

(c)The thirteen and thirty-nine weeks ended February 23, 2020, both include a $2.6 million loss related to the withdrawal from a multiemployer pension plan by Lamb Weston RDO.

(d)In November 2018, we entered into an agreement to acquire the remaining 50.01% interest in Lamb Weston BSW. Our Consolidated Statements of Earnings includes 100% of Lamb Weston BSW’s earnings beginning November 2, 2018.

Lamb Weston’s largest customer, McDonald’s Corporation, accounted for approximately 10%of consolidated “Net sales” in all periods presented in Consolidated Statements of Earnings. No customer accounted for more than 10% of our consolidated accounts receivable as of February 23, 2020 or May 26, 2019.