Top US meat producer Tyson anticipates sales in its new fiscal year will be above Wall Street expectations as the company bets on steady consumer demand for its cuts despite persistently high inflation.
Tyson forecast revenue of $55bn to $57bn in fiscal year 2023, above analyst estimates of $53.6bn, as compiled by Refinitv. The company also reported record annual sales of $53.3bn in the 12 months to October 1, as consumers accepted higher meat prices.
“We delivered record sales and earnings for the full year, which was supported by our diverse portfolio and continued strength in demand for protein,” said chief executive Donnie King, and driven by Tyson’s beef and poultry segments.
Revenue in the fourth quarter was $13.7bn, up from $12.8bn a year earlier, as prices rose by an average of 5.1 per cent across Tyson’s businesses.
Supplemental earnings materials suggested that chief financial officer John R. Tyson, son of Tyson chair John Tyson, would make his first appearance on a company earnings call after being appointed in October. The executive was arrested earlier this month for public intoxication and trespassing after a university-aged woman found him asleep in her bed without his clothes.
Despite record sales, inflationary pressures on consumers were apparent as demand for premium beef cuts decreased, sending beef prices down by 8.2 per cent in the latest quarter. Tyson also had to contend with the inflationary environment as higher costs squeezed margins throughout its businesses.
Margins took a hit in the latest fiscal year due to higher live cattle and hog costs, while operating costs in its poultry division were pushed up by a $635mn jump in chicken feed costs.
Beef sales volumes in FY2022 were flat, while volumes for pork fell and chicken increased. For FY2023, the US agriculture department expects domestic beef production to fall, pork production to be flat, and chicken production to increase.