Lamb Weston stock gained in premarket trading Tuesday after the company raised its financial targets for fiscal 2027, citing momentum across key customer segments, ongoing cost-saving initiatives, and margin improvement.

The frozen-potato supplier, supplying french fries for chains like McDonald's and Chick-fil-A, posted fiscal first-quarter adjusted earnings of 75 cents a share, surpassing analysts' calls for 59 cents. Revenue grew 1% to $1.67 billion, slightly topping Wall Street's estimates of $1.65 billion.

The company raised its outlook for fiscal 2027, citing higher sales volume in the North America division and improved operating margins on cost-saving measures such as shutting down some facilities and cutting its global workforce by approximately 4%.

Lamb Weston now expects net sales in the fiscal year to increase by low single digits, up from a prior benchmark of up to 1%. The company projects adjusted earnings to range from $3.05 and $3.35 a share , above a previous outlook of $2.95 to $3.25.

Management previously noted that earnings were expected to surpass top-line sales, driven by cost-savings initiatives and operational efficiencies following restructuring actions.

Lamb Weston stock rose 2.9% to $45.85 in premarket trading Tuesday. Shares have risen nearly 8% this year, according to Dow Jones Market Data.

Aside from the positive outlook, Lamb Weston saw some declining figures. The company's net income dropped 55% from the year before to $29.1 million, down from $64.3 million. Adjusted earnings before interest, taxes, depreciation, and amortization also fell nearly 6% to $285.6 million, falling short of $302.2 million from last year.