Sales rose just 2% to $10 billion as Chicken and Pork segments faced stiff headwinds.
The company gained from increasing demand for protein-rich products, which has been fueling performance in the Beef and Prepared Foods segments. Tyson has benefited from the rapidly growing demand for fresh and organic food options, courtesy of increasing health consciousness.
For fiscal 2018, the company expects sales to grow about 6% to $40 billion – $41 billion. For fiscal 2019, Tyson expects sales to grow to $42 billion due to volume growth, mix and about $150 million from the impact of the Tecumseh Poultry and American Proteins acquisitions net of divestitures.
The company predicts capital expenditures to approx $1.2-$1.3 billion for fiscal 2018 and $1.6 billion for fiscal 2019. Capital expenditures will include spending for production growth, safety, animal well-being, infrastructure replacements and upgrades, and operational improvements that will result in production and labor efficiencies, yield improvements and sales channel flexibility.
Recently in July-end, Tyson lowered its annual profit forecast due to uncertainty in trade policies, increased tariffs that could negatively impact domestic and export prices, mainly chicken and pork, and increased volatility in the commodity markets. The company had lowered adjusted earnings guidance to around $5.70-$6.00 a share from $6.55-$6.70 a share.
In fiscal 2019, the company expects industry fed cattle supplies in Beef to rise about 2%, and industry hog supplies in Pork to increase about 3%. In fiscal 2018, the company expects to capture Financial Fitness Program net savings of about $80 million for the Chicken segment and about $140 million for Prepared Foods. Tyson expects to close on the sale of its pizza crust business in the fourth quarter of fiscal 2018.
Shares of Tyson ended Friday’s regular trading session up 0.35% at $57.75 on the NYSE. The stock fell more than 8% for the past year and more than 28% for the year-to-date.