Tyson Foods Inc (TSN) recently announced its first-quarter FY24 results, leading to an increase in its stock price. The company reported sales of $13.32 billion, a 0.4% increase compared to the previous year and surpassing the analyst consensus of $13.27 billion.
While sales volume for beef declined by 4.1% year-over-year (YoY), pork sales rose by 7.7%, chicken sales declined by 1.5%, and prepared foods grew by 2.5%. The gross profit decreased to $823 million from $968 million a year ago, with the margin contracting from 7.3% to 6.2% over the same period. Adjusted operating income also declined by 9% YoY to $411 million, with a margin of 3.1% compared to 3.4% in the previous year.
However, the adjusted earnings per share (EPS) of $0.69 beat the analyst consensus of $0.41. Tyson Foods ended the quarter with $1.48 billion in cash and cash equivalents.
Despite the mixed financial results, the company reaffirmed its outlook for FY24. Tyson Foods expects sales to remain relatively flat YoY, with adjusted operating income projected to be between $1.0 billion and $1.5 billion. The company also anticipates capital expenditures of $1.0 billion to $1.5 billion for the fiscal year.
Looking at the broader industry, the United States Department of Agriculture (USDA) predicts a slight increase in domestic protein production (beef, pork, chicken, and turkey) for FY24. Beef production is expected to decrease by approximately 2% YoY, while pork production is predicted to increase by about 2%. Chicken production is projected to remain flat YoY.
Following the announcement of the first-quarter results, Tyson Foods’ stock price experienced a significant boost. Shares were up 7.2% at $60.43 at the time of writing.
Overall, Tyson Foods’ first-quarter FY24 results were a mixed bag, with sales and gross profit showing modest growth, while adjusted operating income declined. However, the company’s adjusted EPS outperformed analyst expectations. As Tyson Foods moves forward, it will need to navigate industry trends and maintain its competitive position to achieve its projected financial targets for FY24.
