2023-11-13 12:35:28
Tyson Foods on Monday forecast revenue for its next fiscal year below Wall Street estimates, following missing forecasts for fourth-quarter revenue, hit by falling chicken and pork prices as well as slowing demand for its beef products.
With rising food prices and interest rates straining household budgets, U.S. consumers have cut back on meat purchases, hurting sales at companies such as Tyson and Pilgrim’s Pride.
Prolonged headwinds, such as shrinking U.S. cattle herds due to persistent drought, as well as high labor and raw material costs, further weighed on Tyson’s margins .
The company said volumes in its largest cattle segment fell 6.7% in the quarter ended September 30, while prices rose 10.2%.
In contrast, chicken volumes increased 1.7% during the quarter as customers opted for cheaper alternatives to premium proteins. But chicken prices, which hit a record high in U.S. grocery stores, fell 9.2% in the quarter for Tyson.
The American meatpacker expects sales to be flat in fiscal 2024 compared to the total sales of $52.88 billion it posted in fiscal 2023. Analysts, on average expect sales of $54.40 billion, according to LSEG data.
The company’s fourth-quarter sales declined 2.8% to $13.35 billion. Analysts, on average, expected sales of $13.71 billion.
However, the company posted adjusted earnings of 37 cents per share, compared with analysts’ average estimate of 29 cents.
Tyson, the largest U.S. meat producer by revenue, has cut jobs, closed some chicken processing units and is considering selling its poultry business in China, according to sources, in an attempt to rein in its costs.
Asked by Archyde.com on Monday, Chief Financial Officer John Tyson said: “We continue to evaluate everything.”
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