Tyson Foods Inc. plunged the most since March 2020 after the biggest US meat company cut its full-year sales forecast on what it described as “challenging” market conditions.
The company said it now sees revenue of $53 billion to $54 billion this year, below its earlier forecast of $55 billion to $57 billion. The midpoint of Tyson’s revised range is lower than the lowest of analyst estimates compiled by Bloomberg. Shares were down 13% to $52.78 at 9:34 a.m. in New York to its lowest since April 2020.
“I can’t remember a time when our business faced the highly unusual situation that we’re currently seeing, where all three of our core protein categories—beef, pork and chicken—are experiencing market challenges at the same time,” Chief Executive Officer Donnie King said Monday on the company’s second-quarter earnings call.
Tyson and other meat producers have been squeezed by record-high cattle costs and elevated animal feed prices, just as inflation-hit consumers have been trading down to cheaper foods. That’s a shift from recent years, when disruptions linked to the Covid-19 outbreak resulted in record profits for meat companies.
“Challenging protein-market fundamentals and weaker-than-expected volumes mean adjusted operating margins in beef, pork and chicken may get worse before getting better,” Jennifer Bartashus, senior industry analyst at Bloomberg Intelligence, said of Tyson’s second-quarter earnings released Monday.
Tyson announced last month it was cutting 10% of its corporate staff and in March said it was shuttering two underperforming poultry operations in a bid to strengthen its chicken segment. The company posted increased poultry sales and a 2.9% decline in beef sales in the second quarter, according to its earnings report. Prices for pork dropped more than 10%.