Tyson Foods reported third quarter sales of$10.885 billion and net sales of $31.521 billion over the first nine months of its fiscal year. The prepared foods and beef segments produced the strongest results for the company, while chicken sales were flat and the pork segment was negatively affected in increased hog coast, said President/CEO Noel While.
“Overall, third quarter earnings were in line with our expectations,” said White. “Volume growth in our core retail lines continues to outpace other large food companies and the total food and beverage category, driven primarily by our new product innovation.”
Summary of Segment Results
- Beef - Sales volume increased for the third quarter and first nine months of fiscal 2019 due to improved availability of cattle supply and stronger demand for Tyson’s beef products. Average sales price increased for the third quarter and first nine months of fiscal 2019 as demand for beef products remained strong. Operating income decreased for the third quarter of fiscal 2019 from record results in fiscal 2018 associated with higher fed cattle costs as well as increased operating and labor costs. Operating income increased for the first nine months of fiscal 2019 as the company continued to maximize its revenues relative to live fed cattle costs, partially offset by increased operating and labor costs.
- Pork - Sales volume increased for the third quarter of fiscal 2019 due to increased domestic availability of live hogs. Average sales price decreased for the first nine months of fiscal 2019 associated with excess supply, partially offset by increased average sales price in the third quarter of fiscal 2019 as live hog costs increased. Operating income decreased for the third quarter and first nine months of fiscal 2019 due to periods of compressed pork margins caused by excess domestic availability of pork and increased hog costs in the third quarter of fiscal 2019.
- Chicken - Sales volume increased for the third quarter and first nine months of fiscal 2019 primarily due to incremental volume from business acquisitions. Average sales price decreased for the third quarter and first nine months of fiscal 2019 due to sales mix primarily associated with the acquisition of a poultry rendering and blending business in the fourth quarter of fiscal 2018. Operating income decreased for the first nine months of fiscal 2019 due to increased operating costs and market conditions, partially offset by increased results in the third quarter of fiscal 2019 which was impacted by lower feed ingredient costs including hedging results.
- Prepared Foods - Sales volume decreased for the third quarter and first nine months of fiscal 2019 primarily from business divestitures. Average sales price increased for the third quarter and first nine months of fiscal 2019 due to product mix which was positively impacted by business divestitures, while pricing increases in the company’s ongoing business from the pass through of raw material costs also contributed to the increase in average sales price for the third quarter of fiscal 2019. Operating income was relatively flat for the third quarter of fiscal 2019 as compared to the third quarter of fiscal 2018 despite increased raw material costs. Operating income increased for the first nine months of fiscal 2019 due to strong demand for our products and improved product mix, partially offset by increased operating costs. Additionally, operating income was impacted in the first nine months of fiscal 2018 by a $79 million impairment, net of realized gain, associated with the divestiture of non-protein businesses.
Source: Tyson Foods Inc.
