Quarterly performance
FY2024 expectations
In its earnings report, Tyson indicated that the US Department of Agriculture anticipates a slight decrease in domestic protein production in fiscal year 2024. At the same time, the company is seeing consumer demand for protein remain relatively stable. Despite some uncertainties within the protein categories, overall sales are expected to remain relatively flat in FY2024 versus FY2023.
In the chicken segment, sales decreased double-digits in the fourth quarter of 2023 due to lower pricing. Volumes saw modest growth but production declined as the company focuses on balancing supply with demand. Tyson anticipates operational improvements in this segment to continue into FY2024 and has forecast adjusted operating income of $400-700 million for the year.
In beef, revenue saw a slight increase in Q4 as higher pricing offset lower head throughput. Operating profit declined, reflecting spread compression due to higher cattle costs. This segment is likely to remain pressured in FY2024 by tight cattle supply and spread compression. Tyson expects adjusted operating income to range between a loss of $400 million and breakeven for the year.
Revenues in the pork segment declined in Q4 due to lower pricing caused by softer global demand. Adjusted operating loss for the quarter narrowed from last year. For FY2024, the company anticipates adjusted operating income to improve to roughly breakeven.
Revenues in prepared foods saw a modest decline in Q4 caused by lower bacon pricing, which was offset by volume growth. Lower pricing, higher marketing costs, and start-up costs for new facilities were offset during the quarter by productivity initiatives and easing inflation.
Volume growth, productivity and revenue management are expected to act as tailwinds for prepared foods in FY2024 with pressure from marketing and start-up costs as well as possible changes in consumer behavior. Adjusted operating income for this segment is expected to range between $800 million to $1 billion for the year.