By Lauren Thomas

Activist investor Starboard Value has built a sizable stake in french-fry maker Lamb Weston and is pushing the company to speed up improvements and cost cutting to boost its underperforming stock, according to people familiar with the matter.

The details

Starboard is now one of the biggest shareholders in Lamb Weston, the people said. The exact size of the firm's stake couldn't be learned.

Starboard has been an investor in the company for a while and recently saw an opportunity to scoop up even more shares with the business looking undervalued, the people added.

Lamb Weston, based in Idaho, has a market value of close to $6.5 billion and is a major producer of frozen-potato products including french fries, hash browns and tater tots. It is the largest producer of french fries in North America and the second-biggest globally, with customers including McDonald's and Chick-fil-A.

A recent rough patch has intensified pressure on the company to turn its business around. Lamb Weston shares are down more than 10% over the past 12 months.

Last summer, Lamb Weston struck a deal with another activist investor, Jana Partners, which had pushed for operational and capital-allocation improvements, as well as a potential sale of the entire company. Jana won a number of board seats, averting a proxy fight.

Starboard has been engaging privately with Lamb Weston and is supportive of the current management team and Jana's efforts, the people familiar with the matter said. However, the firm believes there is more work to be done and a greater sense of urgency is needed, the people added.

A Lamb Weston representative said in a statement that the company values "ongoing and constructive dialogue" with its shareholders. "The board and management team are acting with urgency and have taken significant steps to position Lamb Weston for long-term success in a dynamic marketplace," the representative said.

The context

Lamb Weston has been working to overhaul its operations after challenges including rising menu prices dented demand for its products. The company suffered further after it was seen by analysts and investors as expanding capacity too quickly and increasing its own prices too sharply.

It appointed a new chief executive officer, Mike Smith, in January 2025.

At the end of last year, Lamb Weston warned that its profit would face pressure from discounting to win back business and rising manufacturing costs internationally, sending shares tumbling more than 20% in a day.

The company has said previously that it expects to achieve at least $250 million of annual cost savings in the coming years. Starboard believes the goal should be at least twice that figure, the people familiar with the matter said.

Starboard thinks that the company is best-in-class in an industry that is already consolidated and has proved that it can win back lost market share, especially in North America, the people added. With the company's international operations remaining more challenged, Starboard believes Lamb Weston should consider selling off its Asia Pacific business, the people said.

Starboard previously built stakes in Outback Steakhouse owner Bloomin' Brands and Olive Garden parent Darden Restaurants. It was also previously an investor alongside Jana in the aerospace and defense-tech company Mercury Systems. Starboard is currently in the middle of a fight at Tripadvisor.

Write to Lauren Thomas at lauren.thomas@wsj.com

(END) Dow Jones Newswires

March 08, 2026 19:05 ET (23:05 GMT)

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