Shares of Lamb Weston (NYSE: LW) — North America’s largest potato producer — were sliding again after it delivered third-quarter results before the start of Thursday trading that missed estimates, offered weak guidance, and said it was replacing its CEO.

As of 11:37 a.m. ET, the stock was down 21.2% on the news.

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Lamb Weston’s problems are multiplying

Lamb Weston’s revenue in the quarter fell by 8% year over year to $1.6 billion, which missed the consensus estimate of $1.67 billion. The underperformance came as demand for its frozen potato products continues to be weak.

Results were even worse on the bottom line as the company’s manufacturing costs were higher than expected and volume continued to be soft. That led to a 41% decline in adjusted operating income to $178 million, while adjusted EPS fell 54% to $0.66, missing the analysts’ consensus expectation of $1.01.

CEO Tom Werner said the results “were below our expectations.” The company also announced that COO Michael Smith would replace Werner as its next CEO, effective Jan. 5. Werner will stay on in an advisory role through Aug. 31, 2025.

The leadership change seemed to reflect the influence of activist investor Jana Partners, which took a stake in Lamb Weston two months ago and had been calling for a management overhaul or for the company to find an acquirer. In a statement, Jana said it was not satisfied with the move, asserting that more significant changes, or a sale of the company, were needed.

What’s next for Lamb Weston

The potato company also gave a disappointing outlook, cutting its full-year revenue forecast by about 4.5% at the midpoint, from a range of $6.6 billion to $6.8 billion to a new range of $6.35 billion to $6.45 billion.

It also lowered its EPS guidance from a range of $4.15 to $4.35 to a range of $3.05 to $3.20.

Clearly, not much is going right for Lamb Weston. Jana Partners seems to be correct that the company needs a major overhaul. Expect the activist firm to push for more aggressive action, as a sale might make the most sense.

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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.