Tyson Foods has recorded net income of $316 million for the first quarter, which ended on 31 December.
Despite revenue growth of 2.5% to $13.26 billion, the company was negatively affected by an 8.5% decline in beef prices. Sales volumes for pork fell by 7.4%.
Adjusted operating income declined 68% to $453 million, and adjusted EPS fell 70%.
According to Reuters, greater-than-expected domestic supplies of beef weakened demand for Tyson’s chicken. The company reportedly failed to forecast the amount of protein on the market, as drought in the western US prompted ranchers to reduce cattle herds by sending more animals to slaughter. Meanwhile, an outbreak of bird flu that triggered export restrictions resulted in a larger-than-expected national supply of chicken.
Reuters cites Tyson CEO Donnie King, who told analysts on a call that meatpacking executives had expected that chicken would need to fill a projected gap in meat supplies caused by reduced production of beef and pork.
In the company’s Q1 earnings release, King said: “We executed our strategy in Q1, growing volume, improving staffing levels, investing in automation and building inventory to meet customer demand, all while maintaining a focus on liquidity and financial health. The strength of our retail brands, including Tyson, Jimmy Dean, Hillshire Farm and Ball Park, was demonstrated by the growth in prepared foods, most notably with Jimmy Dean ending the quarter at its all-time highest volume share.”
He continued: “We faced some challenges in the first quarter. Market dynamics and some operational inefficiencies impacted our profitability. We expect to improve our performance through the back half of fiscal 2023 and into the future, as we strive to execute with excellence and work to become best in class in our industry.”
Tyson expects full-year sales to be between $55 billion and $57 billion.
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