Lamb Weston warns of margin pressure as Middle East conflict hits international unit

April 1 (Reuters) - Lamb Weston LW.N warned on Wednesday that margins would come under pressure in the current quarter, weighed down by weakness in its critical international business, exacerbated by the Middle East conflict.

The company, which counts McDonald's MCD.N and Yum Brands YUM.N among its customers, said the Middle East represents a high single-digit share of its international business.

Shares of the company tumbled 5% in early trading on Wednesday.

• The company expects current-quarter adjusted gross margin to be down 250 basis points to 300 basis points from the third quarter's 20.9%, accounting for potential impact from the ongoing conflict in the Middle East.

• Lamb Weston forecast annual revenue of $6.45 billion to $6.55 billion, up from its previous range of $6.35 billion to $6.55 billion and roughly in line with analysts' expectations.

• "We are focused on controlling what we can control, acting with urgency across the company and being disciplined in our capital investments," CEO Mike Smith said.

• Quarterly net sales for the North America segment increased 5% to $1.03 billion, while it fell 1% at its international unit due to soft demand.

• The company posted third-quarter revenue of $1.56 billion, above estimates of $1.49 billion, according to data compiled by LSEG.

• The company reported an adjusted quarterly profit of 72 cents per share, beating estimates of 61 cents.

• Earlier in the month, activist investor Starboard urged Lamb Weston to double its cost-cutting goal to about $500 million by 2028 from its current plan of at least $250 million.

• The company now expects to exceed its cost-saving target of at least $250 million by fiscal 2028.