Beef business weighs on Tyson Foods

SPRINGDALE, ARK. — As the final days of Tyson Foods’ fiscal year wind down in September, executives revealed a revised, gloomier outlook for its Beef business segment beyond the projected loss of between $500 million and $650 million announced as part of its third-quarter report in early August.

The company is now projecting a loss of between $625 million and $775 million. The company’s share price on the New York Stock Exchange on Sept. 3 dipped more than 7% in afternoon trading after the new outlook was announced, which included companywide adjusted operating income expectations declining from $2.1 billion to $2.3 billion, as of Aug. 3, to between $1.85 billion and $2.05 billion.

“The revised outlook is primarily driven by significant margin compression amid volatile cattle prices and one of the most severe cattle shortages in US history, as well as the expected impact of lower cattle prices on the value of live cattle inventories,” the company said.

The outlooks for the company’s other segments also were revised, including Chicken to between $1.85 billion to $1.95 billion (down from $1.9 billion to $2.05 billion), and Pork to between $200 million to $250 million (down from $250 million to $300 million). The company’s outlook for its Prepared Foods ($1.30 billion to $1.35 billion) and International ($150 million to $200 million) segments did not change.

Tyson’s leadership addressed the company’s recent efforts to reduce costs with plans to improve its financial performance in the coming fiscal year.

“The Beef pressures that have intensified this quarter reflect industry-wide cattle-cycle dynamics that required decisive action,” said Donnie King, president and chief executive officer.   “As announced in August, we are restructuring our Beef network around three strategically located facilities in the central United States to create a more efficient and competitive footprint for the long term. We expect these actions to begin reducing operating cost pressures as we enter fiscal 2027.”

The company said challenges in the foodservice sector are the result of more cautious consumer spending, but its Chicken segment is reaping the benefits of customer partnerships and adding to its value-added product mix.

With a glut of pork available in the current market, prices and product values have declined, outpacing lower production costs and limiting profitability.

Meanwhile, the company said its Prepared Foods and International business segments continue to thrive in an environment that has consumers seeking value as the cost of living continues to rise.

“Our diversified, multi-protein portfolio helps us manage pressure from individual commodity cycles,” King said. “We enter fiscal 2027 with a healthy balance sheet, continued momentum in our branded businesses and a clear strategy to drive long-term growth.”