Tyson Foods Inc on Monday posted a surprise second-quarter loss and cut its full-year revenue forecast on falling beef and pork prices, sending the U.S. meat packer’s shares tumbling 9% before the bell.
The Jimmy Dean sausages maker also missed second-quarter revenue estimates.
Average sales prices of beef and pork were down 5.4% and 10.3%, respectively, in the reported quarter, with CEO Donnie King saying the current protein market remained challenging.
Sales from Tyson’s beef business, the company’s biggest, fell 8.3% to $4.62 billion, while the chicken division saw an 8.4% increase to $4.43 billion.
Sales volumes in Tyson’s beef segment fell 3%, while chicken volumes were up 6.4%.
The company, however, reported a 1.6% jump in average sales price in its prepared foods segment in the reported quarter, while volumes declined 0.4%.
The company also lowered its 2023 adjusted operating margin expectations for all of its primary segments — beef, pork and chicken — citing an uncertain macroeconomic environment in the year.
U.S. meat packers have bumped up prices of their products to safeguard margins from spiraling costs of animal feed, labor, freight and commodity prices, aggravated due to lingering drought situation and supply chain issues.
Tyson now expects fiscal 2023 sales between $53 billion and $54 billion, compared with its previous forecast of $55 billion to $57 billion.
The Springdale, Arkansas-based meat packer’s net sales were $13.13 billion in the quarter ended April 1, compared with analysts’ average estimate of $13.62 billion, according to Refinitiv data. Tyson posted an adjusted loss of 4 cents per share, compared with analysts’ expectations of a profit of 80 cents per share.
(Reporting by Granth Vanaik in Bengaluru; Editing by Shilpi Majumdar)
