Tyson Foods profit tops estimates on strong beef and pork demand
Despite worries that budget-conscious consumers would opt for less expensive proteins, swelling demand for beef and pork helped shore up weak margins for the largest U.S. meat-packer.
Volumes in beef rose, hinting at resilient demand at a time when U.S. meat-packers are struggling with a tight cattle supply and producers remain unwilling to rebuild the herd. Beef segment operating margins improved from a poor year-ago quarter, but remained in the red.
The United States saw its herd shrink to its smallest level in seven decades, following a standstill in herd expansion as years of drought burned up pastures and forced farmers to send more cows to slaughter.
Although chicken volumes fell slightly in the quarter, over half of the company's outlook for adjusted 2025 operating income of $1.8 billion to $2.2 billion is expected to come from chicken. The beef segment was expected to continue to struggle against market headwinds.
"We remain concerned about the beef outlook over the next two years," said Piper Sandler analyst Michael Lavery, adding that momentum in chicken was better than expected though there was "some downside risk" to prices.
Tyson stock was up 8.6% at $63.98 a share in morning trading.
Tyson posted an adjusted operating margin of 3.8% in the fourth quarter, compared with 1.8% a year earlier, helped by lower grain prices and a drop in raw material expenses such as cost of feed and livestock.
Adjusted earnings stood at 92 cents per share, above analysts' estimates of 69 cents, according to data compiled by LSEG.
Tyson Foods' net sales rose 1.6% to $13.57 billion, compared with the average analyst estimate of $13.39 billion.
The company expects fiscal 2025 revenue to be between flat and down 1%. Analysts had expected 1.8% growth to $54.09 billion.
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