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Key Takeaways
- Tyson Foods beat profit and sales estimates as it cut costs.
- The company’s revenue got a boost from higher prices for beef, which helped offset lower volumes.
- Tyson reduced expenses by moving to close several chicken processing plants last year.
Tyson Foods (TSN) shares rose after the largest U.S. poultry producer’s cost-cutting measures helped it report better-than-expected results.
Tyson posted first quarter fiscal 2024 profit of 69 cents per share, down 9% year-on-year, but beating estimates by 68%. Revenue was up 0.4% at $13.32 billion, also more than analysts’ estimates.
A 10.5% jump in average prices helped lift the company’s beef sales by 6.3% to $5.02 billion, even as volumes fell 4.1%. Lower prices dragged down chicken and pork revenue.
In August, Tyson announced it would be closing four chicken processing plants after shuttering two others in May. CEO Donnie King said the decision “demonstrates our commitment to bold action and operational excellence as we drive performance, including lower costs and improving capacity utilization.”
The company raised its full-year adjusted operating income (AOI) for its chicken unit from a range of $400 million to $700 million to $500 million to $700 million. It sees the adjusted operating income at its pork unit rising year-on-year from breakeven to $100 million in fiscal 2024.
Shares of Tyson were 1.28% higher at $57.02 per share as of about 12.18 p.m. ET Monday. They are down 6.6% over the past year.
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