Shares of Lamb Weston (LW) plunged nearly 20% in premarket trading Thursday after the maker of frozen fries swung to a surprise loss, cut its fiscal 2025 guidance, and appointed a new Chief Executive Officer (CEO).

The Idaho-based company reported a second-quarter loss of $36.1 million, or $0.25 per share, while analysts polled by Visible Alpha were expecting a profit of $88.0 million, or $0.61 per share. Revenue of $1.60 billion also was shy of expectations.

In a separate release, Lamb Weston announced that current Chief Operating Officer (COO) Michael J. Smith would take over the CEO role from Tom Werner, effective Jan. 3. Werner, who also will be replaced by Smith on the board, "will serve in an advisory role through August 31, 2025 to ensure a smooth transition," the company said.

Lamb Weston Slashes Fiscal 2025 Outlook

The company cut its fiscal 2025 targets, now projecting sales of $6.35 billion to $6.45 billion, earnings per share (EPS) of $2.30 to $2.45, and adjusted EPS of $3.05 to $3.20. Last quarter, it guided for sales of $6.6 billion to $6.8 billion, EPS of $2.70 to $3.15, and adjusted EPS of $4.15 to $4.35, with both per-share targets having been reduced from prior targets.

"In terms of the broader operating environment, we expect challenging conditions to persist through the remainder of fiscal 2025 and into fiscal 2026, driven primarily by an accelerating rate of capacity additions and continued near-term softening of global frozen potato demand below historical rates, particularly outside North America, until demand trends improve and capacity expansion normalizes," Werner said.

Lamb Weston shares were down nearly 28% on the year through Wednesday and fell a further 18% in premarket trading.

UPDATE—This story has been updated with the new CEO appointment and the latest share price.