Tyson Foods has reported a 15% decrease in net income to $364 billion in its second quarter results and expects volumes to fall in the second half of fiscal 2020.
Despite an increase in demand from retailers for its beef, pork and poultry products, Tyson said these were not sufficient to offset the losses in foodservice closures due to Covid-19.
However, the owner of brands such as Jimmy Dean and Hillshire Farm saw its net sales rise 4.3% to $10.89 billion with total volume growth of 2.6% during the second quarter.
For the three months to 28 March, Tyson’s beef unit recorded the biggest sales of $3.98 billion as volumes rose 2.7%.
Its pork segment volumes also rose by 2% due to increased demand especially in consumer products. Meanwhile, Tyson’s chicken and prepared food segments saw volumes shrink.
The company’s financial results follow the order by President Trump to keep meat-processing plants open to protect the US food supplies, which drew backlash from multiple unions voicing concerns that at-risk workers need more protection.
Tyson Foods, among other companies such as Smithfield Foods, Cargill and JBS USA, have shut down operations in recent weeks in North America as workers fell sick with Covid-19.
Noel White, Tyson Foods’ CEO, said: “During the quarter, we witnessed an unprecedented shift in demand from foodservice to retail, temporary plant closures, reduced team member attendance, and supply chain volatility as a result of the virus. Despite these challenges, we were able to adjust our product mix and redirect products to the appropriate channels.
“While we cannot anticipate how long the challenges presented by Covid-19 will persist, we remain focused on driving long-term growth. Our solid balance sheet, ample liquidity, scale and diversity continue to give us confidence in our long-term outlook.”
The company added: “We continue to proactively manage the company and its operations through this global pandemic. Given the nature of our business, demand for food and protein may shift amongst sales channels and experience short-term disruptions, but over time we expect worldwide demand to continue to increase.
“We are experiencing multiple challenges related to the pandemic. These challenges are anticipated to increase our operating costs and negatively impact our volumes for the remainder of fiscal 2020.”
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