A look at Tyson Foods’ (TSN) expectations for the remainder of FY2024

Shares of Tyson Foods, Inc. (NYSE: TSN) fell over 7% on Monday. The stock has gained 7% year-to-date. The company delivered mixed results for the second quarter of 2024, with earnings surpassing estimates but revenue falling short. Here’s a look at its expectations for the remainder of the fiscal year:

Quarterly numbers

Tyson reported sales of $13.07 billion for the second quarter of 2024, which was down slightly from the prior-year period and below expectations of $13.16 billion. The company reported GAAP EPS of $0.41 compared to a loss per share of $0.28 last year. Adjusted EPS was $0.62 compared to a loss of $0.04 per share last year. Adjusted EPS beat estimates of $0.39.

FY2024 expectations

In the second quarter, the decrease in total sales was caused by a 9% decline in the Chicken segment, partly offset by a 7% increase in the Beef segment. Adjusted operating income (AOI) jumped to $406 million in Q2 from $65 million in the year-ago quarter, driven mainly by Chicken. Tyson expects its sales for FY2024 to remain relatively flat compared to FY2023. It expects adjusted operating income to range between $1.4-1.8 billion for the year.

In Q2, sales in the Prepared Foods segment dipped 1% year-over-year, with volume growth driven by the Williams acquisition and a decrease in average sales price caused by mix. Adjusted operating income decreased 7%, mainly due to start-up costs and mix. Tyson expects adjusted operating income of $850-950 million for this segment in FY2024.

The Chicken segment saw volume decrease over 6% in Q2 due to lower production. Average sales price was down over 2%, partly due to pass-through of lower input costs. This segment recorded adjusted operating income of $160 million compared to a loss of $166 million last year, helped by strategic actions, operational efficiencies and lower input costs. Adjusted operating income is expected to range between $700-900 million for the full year.

In Q2, the sales growth in Beef was driven by higher price per pound and higher average carcass weights. Volume grew nearly 3% while price increased 4.5%. This segment recorded an adjusted operating loss of $34 million in the quarter due to spread compression. For FY2024, the company expects adjusted operating loss to range between $100-400 million in this division.

Sales in the Pork segment rose 4%, helped by higher pricing and volume growth. Adjusted operating income was $33 million compared to a loss of $31 million last year. This growth was driven by an improvement in spreads. Tyson expects AOI for this segment to range between $50-150 million in FY2024.