Tyson Foods executives focused on Prepared Foods and Chicken momentum during the fiscal first-quarter earnings call. The company reported sales of over $14 billion, with a 6.2% increase year-over-year. Segment operating income was $811 million, down 12% from the prior year, with adjusted earnings per share at $0.97, a 15% drop.
A change in segment reporting aims to provide investors with greater transparency. Tyson will now present results using “segment operating income,” excluding corporate expenses and amortization. Management hopes this change will empower business leaders to pursue growth and improve decision-making.
Prepared Foods saw an 8.1% sales growth driven by volume, channel mix, and pass-through pricing. Segment operating income was $338 million, reflecting progress on enhancing profitability. Commodity costs were up approximately $100 million, but pricing was catching up.
The Chicken segment reported $459 million in segment operating income with a 10.9% margin. Sales rose 3.6% year-over-year, driven by volume, product mix, and diversified pricing strategies. Tyson expects fiscal 2026 to resemble fiscal 2025 in terms of the overall chicken environment.
Tyson’s Beef business remained challenging due to higher cattle costs. Segment operating income declined, driven by cattle costs, cutout values, drop credit, and manufacturing costs. Management expects cattle supplies to remain tight through 2026 and 2027.
In Pork, segment operating income margin increased to 6.7%, driven by network optimization and efficiencies. Hog supplies were adequate, and projections for ample supply in the upcoming year are favorable. Tyson’s International segment continued its positive momentum.
Tyson maintained its fiscal 2026 guidance, expecting sales growth of 2% to 4% and total company adjusted operating income of $2.1 billion to $2.3 billion. Free cash flow outlook was raised to $1.1 billion to $1.7 billion. Segment operating income guidance for fiscal 2026 was provided for each segment.
Tyson emphasized its focus on providing nutritious, affordable, and convenient protein throughout fiscal 2026, navigating a dynamic and challenging market landscape. The company is a global leader in the production, processing, and marketing of protein-based and prepared food products, offering a wide range of fresh and frozen meats.
Read more at Yahoo Finance: Tyson Foods Q1 Earnings Call Highlights