Tyson Foods Inc has raised its forecast for fiscal 2021 revenue and reported higher-than-expected quarterly earnings due to strong demand for its beef products.
Pent-up demand among consumers for a dine-in experience following the easing of COVID-19 restrictions have boosted sales for US meat packers, which have also benefited from robust exports.
“We delivered a strong performance in a strong protein market,” commented Tyson Foods president and CEO Donnie King. “With trusted brands that met strong consumer demand, we have delivered 12 consecutive quarters of share gains in core business lines at retail. Our foodservice volume improved as the restaurant industry began to reopen and recover.
"Our beef business increased production to meet strong US and international demand for higher-quality products. And we continued to build financial strength, reducing our debt and investing in future growth by laying out plans to expand our business, both to address capacity constraints and meet growing demand.”
The company, which recently set out ambitious carbon emission reduction targets, said it expects total sales of about $46 billion to $47 billion (€39.1 billion to (€40 billion) for fiscal 2021, compared with an earlier forecast range of $44 billion to $46 billion. Analysts on average expect sales of $45.09 billion, according to IBES data from Refinitiv.
Tyson has increased beef production to meet strong demand for higher-quality products, according to the company. Its pork business, however, is grappling with limited supplies of U.S. pigs.
In Tyson's chicken business, costs for feed jump by $270 million in the quarter ended July 3. The unit posted a quarterly operating loss of $279 million, compared to a loss of $120 million a year earlier.
Tyson also accrued an additional $225 million to resolve legal claims alleging Tyson engaged in price-fixing in chicken, bringing its total recorded legal contingency accrual to $545 million in the matter.
The chicken and prepared foods businesses "remain pressured," according to Credit Suisse.
Tyson Foods Total Sales
Total sales in the quarter ended July 3 rose to $12.48 billion (€10.61 billion) from $10.02 billion (€8.52 billion) a year earlier. Analysts on average were expecting sales of $11.49 billion, according to IBES data from Refinitiv.
Net income attributable to Tyson increased to $749 million, or $2.05 per share, from $526 million, or $1.44 per share, a year earlier. On an adjusted basis, Tyson earned $2.70 per share, crushing estimates of $1.62.
The group recently announced that COVID-19 vaccines were mandatory for all employees in its US workforce.