Title: "Robust Demand for French Fries Signals Encouraging News for the U.S. Economy"

Consumers continue to indulge in the delightful side of french fries with their meals, and this trend bodes well for the American economy.

Lamb Weston Holdings, the supplier of frozen potatoes, recently reported that the proportion of consumers ordering this iconic side dish with their fast food meals, known as the "fry attachment rate," has remained consistently higher than pre-pandemic levels. CEO Tom Werner shared this insight during the company's earnings call on Thursday. This resilience in consumer behavior suggests that, despite inflationary pressures and mounting recession concerns, American consumers remain steadfast.

Werner stated, "The global demand for frozen potatoes remains strong, with a well-maintained balance between supply and demand." He also noted, "The fry attachment rate, which represents the frequency at which consumers order fries when visiting restaurants or other food service outlets across our primary markets, has remained stable and above pre-pandemic levels."

When consumers face financial strain, it is common for them to cut back on spending by choosing cheaper brands or eliminating unnecessary expenses. For Lamb Weston and fast-food establishments, this could translate to customers forgoing fries and other side orders to manage their spending more effectively.

The impact of inflation extends beyond fry sales, affecting various aspects of the business. While Lamb Weston witnessed minimal changes in total traffic within key U.S. markets, there were discernible shifts in consumer behavior. Growth in quick-service food providers, known for their affordability, offset declines observed in full-service and casual-dining restaurants.

Werner also acknowledged that inflation continues to raise costs for the company, particularly concerning potato contract prices. He cited June as a period of weakness in restaurant traffic during the fiscal fourth quarter. However, he expressed reassurance in the improving trends since then and remained confident in the resilience of the company's potato products, even in the face of an economic downturn.

"We anticipate that restaurant traffic trends may remain volatile in the short term due to factors like high interest rates, inflation, and ongoing uncertainty affecting consumers," Werner noted. "Nevertheless, frozen potato demand has consistently demonstrated resilience during challenging economic periods, and we maintain our optimism regarding the long-term growth prospects of the global category."

Following this positive news, Lamb Weston's stock surged more than 9% during Thursday's trading session. Year-to-date, the stock has nearly mirrored the broader market performance in 2023, showing an impressive gain of almost 11% since the beginning of the year.