Tyson Foods (NYSE:TSN) has reported third-quarter revenue and earnings that fell short of expectations due to slowing demand for its beef products and weaker pricing for pork and chicken, sending its shares more than 6% lower Monday morning.
The food company said in a statement it also plans to close four more chicken plants in the US to help reduce costs and improve capacity utilization.
Sales for the three months to June 30, 2023, declined 2.6% to $13.1 billion, below the $13.6 billion expected by analysts, according to Refinitiv data.
Adjusted earnings per share fell 92% to $0.15.
Sales of beef products fell 5.3% over the quarter despite a 5.2% rise in average prices. Pork prices fell an average of 16% over the quarter, while chicken was down 5.5%.
“While current market dynamics remain challenging, Tyson Foods is fully committed to our vision of delivering sustainable, top-line growth and margin improvement,” president and CEO Donnie King commented.
“I’m encouraged by the improvements we made this quarter, including our Tyson Core Business lines that continue to outpace our peers in volume growth.”
Under a new productivity program introduced in fiscal 2022 aimed at making it better, faster and more agile through continuous improvement, Tyson noted that it has targeted an aggregate of $1 billion in productivity savings by the end of fiscal 2024 relative to a fiscal 2021 cost baseline.
It realized more than $700 million of productivity savings in fiscal 2022, which it said partially offset the impacts of inflationary market conditions, and it surpassed its aggregate $1 billion target in 2Q 2023, more than a year ahead of plan.
The company has guided for full-year 2023 sales of $53 billion to $54 billion.
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