Tyson Foods reported a second fiscal quarter net income loss of $97 million last Monday (May 8), a wide swing from net income of $829 million in the same quarter last year. Revenue was $13.133 billion, up from $13.117 billion a year ago, but $600 million less than the consensus estimate.
The loss comes amid broad challenges in the meat and poultry space. CEO Donnie King said the period was uniquely difficult for the company. “I can’t remember a time when our business faced the highly unusual situation where beef, pork and chicken were all experiencing challenges at the same time,” he said on the earnings call.
Shares of Tyson fell roughly 16% on Monday following the earnings report after it posted a loss and cut its sales forecast. The decline continued Tuesday with its stock down another 4% in early trading.
The company attributes the losses to shoppers spending less on beef and meat products in a high-inflation environment while at the same time, cattle inventory continues to drop. Tyson's costs to buy live cattle increased $305 million and its beef unit's operating margins fell to 0.2% from 12.7% a year earlier. The company pegged full-year beef margins at negative 1% to positive 1%, compared with its previous forecast of 2% to 4%.
"Many of the headwinds experienced are likely to persist for the remainder of the fiscal year," Chief Financial Officer John R. Tyson said.
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