Revenue
Based on the strong results of the first half of the year, Tyson raised its sales outlook for FY2022 to a range of $52-54 billion from the previous range of $49-51 billion. The company expects volumes to grow 1-2% year-over-year.
Segments
Sales in the Beef segment rose 24% year-over-year in Q2 to $5 billion, driven by strong demand, which supported higher average sales price and volume. Operating margin of 12.7% was higher than last year. Tyson expects volume to improve in the second half of FY2022 and adjusted operating margin to range between 11-13% for the year.
In the Pork segment, sales totaled approx. $1.6 billion, up 6% YoY. Average sales increased 10.8% due to higher input costs while volume was down 4.8% due to labor challenges. Operating margins declined to 3.8%. For FY2022, adjusted operating margin is expected to be 5-7%.
Sales in the Chicken segment climbed 15% YoY to $4.1 billion in Q2. Volumes saw an improvement helped by strong consumer demand and operational improvements. Operating margin was 5%. Adjusted operating margin is expected to be 5-7% in FY2022.
Sales for the Prepared Foods segment were up 11% YoY to $2.4 billion. Total volume was down due to labor and supply chain challenges, an uneven recovery in the foodservice channel and the sale of the pet treats business. Operating margins were 11%. In FY2022, Tyson expects adjusted operating margin to be between 8-10%.
The company expects to see lower results in its International/Other segment during FY2022 due to supply chain disruptions and other pandemic-related impacts.
Capex, liquidity and savings
Tyson expects capital expenditures of approx. $2 billion for FY2022. Total liquidity, which stood at around $3.4 billion at April 2, 2022, is expected to remain above the minimum liquidity target of $1 billion. The company is targeting more than $400 million in productivity savings in FY2022 with a goal of reaching $1 billion in savings by the end of FY2024.
Click here to read the full transcript of Tyson Foods’ Q2 2022 earnings conference call