In the middle of the day, the value of shares in Tyson, the largest meat company in the United States, went up by about 3%.
Over the past year, Tyson, which is known for its meat products, had to close five chicken processing plants and two facilities where they cut and packaged beef. They are planning to close another chicken plant this year, even though they previously said they would shut it down.
Tyson’s Chief Financial Officer, John R. Tyson, mentioned in an interview that more shutdowns might happen in the future. He said, “Achieving a great result in Q1 and our business results influence our thinking. But we continue to evaluate all options.”
In the first quarter that ended on December 30, Tyson’s overall adjusted operating income dropped by 9.2%. However, the adjusted income in the chicken business went up by almost 150% from the previous year to $192 million. This was despite the company facing challenges like lower chicken prices and reduced sales volumes due to excess supplies in the past year.
“We are realizing the results of getting our footprint where we want it to be,” said John R. Tyson.
Tyson also saw improvements in the number of chickens hatching and surviving. They resumed using certain antibiotics on farms last year, which contributed to this positive change.
Tyson’s beef business, which is its largest unit, experienced an adjusted operating loss of $117 million in the quarter, compared to earnings of $129 million the previous year. The company had an inventory loss of about $56 million due to a quick decline in cattle futures.
Sales in the beef segment increased by 6.3%, supported by a 10.5% increase in prices, but volumes decreased by 4.1%. Tyson mentioned that consumer spending on expensive beef slowed down in 2023, and the demand for protein remains uncertain.
The company’s pork business saw a 7.7% increase in volume from the previous year, while prices dropped by 8.5% due to an abundance of hog supplies.
Tyson reported adjusted earnings of 69 cents per share, exceeding analysts’ estimates of 41 cents. Net sales went up by 0.4% to $13.32 billion, surpassing analysts’ estimates of $13.27 billion.