Beef prices climbed 24% in second quarter, with chicken up 14%
Tyson shares are trading higher in New York trading Monday
Tyson Foods Inc. lifted its revenue outlook as prices for chicken and beef continue to soar.
The biggest U.S. meat company by sales raised its full-year revenue outlook to a range of $52 billion to $54 billion, from $49 billion to $51 billion previously.
“Although we continue to see inflationary pressures across the supply chain, we are working to drive costs down by continuing to increase our efficiency, productivity and bringing more capacity on line,” Chief Executive Officer Donnie King said in a statement Monday.
Shares climbed 1.2% as of 9:35 a.m. in New York trading despite a broader selloff in equities.
Rising prices for livestock, animal feed, freight and labor have raised costs for the owner of Hillshire Farms and Ball Park hot dogs, which it has thus far been able to pass along to customers.
Tyson’s adjusted earnings in the fiscal second quarter of $2.29 per share topped analyst estimates for $1.90. Sales of $13.12 billion compared with estimates for $12.8 billion.
Beef prices were up 24% in the second quarter, while chicken was up 14% and pork 11% higher.
Tyson, based in Springdale, Arkansas, has also been under pressure by politicians in Washington for elevated meat prices. Consumers are paying higher food prices even as livestock and poultry producers complain that an overly concentrated meatpacking sector results in smaller shares of profits for farmers.
Executives from the four biggest U.S. beef companies denied a conspiracy to fix prices during a hearing last month.
“We recently received a subpoena dated April 21, 2022 from the New York Attorney General’s Bureau of Consumer Frauds & Protection seeking information regarding our sales, prices and production costs of beef, pork and chicken products,” the company reported in a U.S. Securities and Exchange Commission filing. “We are currently evaluating the scope of the subpoena.”
For Tyson, it’s been nearly a year since King took over as CEO. The company said it’s on track to realize $1 billion in productivity savings by the end of the year.
“Management is taking a tighter grip of the reins,” Stephens Inc. analyst Ben Bienvenu said in a note. “We think risk/reward remains attractive here.”
Tyson’s stock has climbed over 4% so far this year, even though it remains shy of the record high of $99.09 reached when it reported results Feb. 7.
Tyson will host a conference call with analysts at 9 a.m. New York time.