Falling chicken and pork prices as well as slowing demand for its beef products are reasons Tyson Foods cited on Monday for missing Wall Street expectations for third-quarter revenue and profit, Reuters reports.
Shares fell about 8%. The company said it is evaluating all operations and closing four more U.S. chicken plants in the latest bid to reduce costs, the article said.
CEO Donnie King shared with analysts that the company is looking at everything in terms of how it works across the board. Tyson has been cutting corporate jobs and shuttering other chicken plants in 2023 because of declining profits and reduced demand from consumers squeezed by inflation and higher interest rates, Reuters reports.
The company raised prices last year to offset spiraling feed and labor costs, but has been hit in 2023 by lower prices in core protein segments. Predicting demand continues to be a struggle and the reduced demand for beef is making it difficult to pass on higher costs to consumers, the article said.
Net quarterly sales fell 3% to $13.14 billion in the quarter ended July 1, below analysts’ expectations of $13.59 billion, according to Refinitiv data. The company’s average sales prices fell 16.4% for pork and 5.5% for chicken, while rising 5.2% for beef.
Chicken demand today has changed greatly from a quarter ago, company leaders shared with Reuters.
In the beef business, Tyson faces reduced profit margins, too, in light of reductions in the U.S. cattle herd.
Net losses attributable to Tyson were $417 million, or $1.18 per share, compared with a net income of $750 million, or $2.07 per share, a year earlier, Reuters reports. On an adjusted basis, Tyson earned 15 cents per share, falling short of analysts’ expectations for a profit of 26 cents per share, according to Refinitiv data.
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