Tyson Foods registered a fall in its fourth-quarter net sales, as falling meat prices affected most of the company’s main business units.
The company – which owns brands such as Jimmy Dean, Hillshire Farm and Ball Park – reported net sales of $9.99 billion for the three months to 29 September 2018, a 1.4% fall when compared to the $10.1 billion figure recorded in the same period last year.
Tyson claimed that average prices for its products dropped 4.1% in the quarter, with average prices falling 14.5% in its pork segment, 7% in its chicken division and 0.6% in its beef segment, Tyson’s largest business unit.
Despite this, chicken and beef sales volumes increased 10.4% and 3.4% respectively, as improved availability of cattle, increased exports, and the impact of acquisitions such as the purchases and integration of AdvancePierre Foods, Tecumseh Poultry and American Proteins.
The company’s operating income in the segment did increase 21.5% to $828 million, thanks in part to the integration of these businesses.
During the quarter, Tyson appointed Noel White as its new president and CEO, replacing Tom Hayes who decided to step down from his position for personal reasons.
White said: “Tyson Foods produced solid earnings in fiscal 2018, demonstrating the strength of our differentiated portfolio and diversified business model.
“We exceeded our revised guidance due to a strong finish in the fourth quarter in the beef and pork segments.
“Prepared Foods drove margin expansion, while the chicken segment closed the gap from earlier in the year with increased promotional activity.
“While we’re not presently in a position to provide GAAP guidance, we believe fiscal 2019 adjusted earnings will be $5.75 to $6.10 per share, based on current assumptions.
“Our outlook excludes any potential impact from the closing of the Keystone acquisition and is relatively equal to fiscal 2018 earnings when excluding the income from businesses held for sale before they were divested. We expect continued strong cash flow generation as we grow sales and volume, particularly in value-added and branded products.”
During the quarter, Tyson agreed to acquire meat product manufacturer Keystone Foods from Marfrig for $2.16 billion.
Tyson Foods also agreed to sell its pizza crust manufacturing business, including Tyson’s major pizza crust production business TNT Crust, to private equity firm Peak Rock Capital for an undisclosed sum.
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