On July 25, 2023, Lamb Weston announced the completion of the design of a new Enterprise Resource Planning (“ERP”) software system that the Company would work to implement across its operations.  The system would interface with the most important aspects of Lamb Weston’s business and operations, including, among other things, inventories and customer order shipments.  According to the Company, the ERP system would drive efficiency through increased automation.

According to the Complaint, Defendants made numerous material misrepresentations and omissions regarding the design and implementation of Lamb Weston’s new ERP system. Specifically, throughout the Class Period, Defendants represented that, through the design of the Company’s new ERP system, Lamb Weston had “strengthen[ed] [its] operational infrastructure.” The Company also downplayed any issues it experienced with the implementation of the system as merely “usual bumps,” and told investors that its financial guidance for fiscal 2024 appropriately accounted for any negative financial impact associated with the system’s deployment.

The truth emerged on April 4, 2024, when Lamb Weston disclosed that it experienced significant challenges in its transition to the new ERP system. The disastrous roll-out caused the Company to lose $135 million in sales during the third quarter of fiscal 2024, and necessitated a $330 million reduction to its sales guidance for the full fiscal year.

On this news, Lamb Weston’s stock price fell $19.59 per share, or over 19%, to close at $81.53 per share on April 4, 2024.

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