Tyson Foods (NYSE:TSN) stock fell in early trade after the protein producer reported first-quarter sales and earnings that were below market estimates.
The Arkansas-based company reported sales of $13.3 billion for the three months to December 31, 2022, 2.5% higher than the same quarter a year earlier but below the $13.5 billion pencilled in by analysts.
Adjusted operating income declined 68% to $453 million and adjusted earnings per share fell 70% to $0.85, below the $1.34 expected by the Street.
The company was negatively affected by an 8.5% decline in beef prices. Sales volumes for pork fell 7.4%, contributing to an operating loss in its pork segment.
“We faced some challenges in the first quarter. Market dynamics and some operational inefficiencies impacted our profitability,” Tyson president and CEO Donnie King said in a statement. “We expect to improve our performance through the back half of fiscal 2023 and into the future, as we strive to execute with excellence and work to become best in class in our industry.”
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The company noted strength in its retail brands over the first quarter, including Tyson, Hillshire Farm, Ball Park, and Jimmy Dean, with the latter ending the quarter at its all-time highest volume share.
It said it anticipates full-year sales of between $55 billion and $57 billion, unchanged from its November 2022 estimate, and expects to exceed its aggregate $1 billion in targeted productivity savings in fiscal 2023, a year ahead of plan. That follows $700 million in savings in 2022 after it launched the new productivity program, which it said is designed to drive a better, faster and more agile organization that is supported by a culture of continuous improvement and faster decision-making.
“We are optimistic about the long-term outlook for Tyson,” King added. “We have the world’s greatest protein brands, an incredible team, and a sound strategy to serve our customers and delight consumers with high-quality, sustainable, affordable protein.”
Tyson’s shares were 4.5% down at $61.52 in late morning trade in New York.
Contact the author at stephen.gunnion@proactiveinvestors.com