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F500-2023-080-Tyson Foods

Tyson Foods is among the world’s largest meat processors. Based in Springdale, Ark., the company recorded $53 billion in revenue, up 13% from the previous year, and projected a robust 2023. 
<ul> 
 	<li>Rising inflation and supply-chain snarls in 2022 trickled down to food, prompting Tyson to increase prices on some of its meats. Such factors, combined with a tighter consumer budget, led to mixed results across Tyson’s product portfolio. For instance, sales of pork and beef decreased, while chicken sales increased, a sign of consumers opting for cheaper proteins.</li> 
 	<li>The company’s CFO and fourth-generation heir, John R. Tyson, was arrested in November 2022 and charged with public intoxication and criminal trespassing. He pleaded guilty, apologized, and received the board’s backing to stay in his role at Tyson Foods.</li> 
 	<li>The company announced plans in December 2022 to consolidate its offices in Illinois and South Dakota and move corporate workers to its headquarters in Arkansas.</li> 
</ul>

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F500-2022-082-Tyson Foods

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<span data-sheets-value="{&quot;1&quot;:2,&quot;2&quot;:&quot;Despite plant closures and mass COVID-19 infections in its workforce, Tyson, the biggest meat producer in the U.S., ended the 2020 fiscal year with net revenues of $43.2 billion, a nearly 2% increase from 2019. After discontinuing a patty made of a mix of real beef and pea protein launched in 2019, Tyson recently debuted an expanded selection of 100% vegan products, including plant-based ground beef, bratwurst, and Italian sausage. The launch comes as the company pushes to gain market share in the plant-based foods market dominated by Beyond Meat and Impossible Foods.&quot;}" data-sheets-userformat="{&quot;2&quot;:14721,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:2,&quot;11&quot;:4,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:11}">Despite plant closures and mass COVID-19 infections in its workforce, Tyson, the biggest meat producer in the U.S., ended the 2020 fiscal year with net revenues of $43.2 billion, a nearly 2% increase from 2019. After discontinuing a patty made of a mix of real beef and pea protein launched in 2019, Tyson recently debuted an expanded selection of 100% vegan products, including plant-based ground beef, bratwurst, and Italian sausage. The launch comes as the company pushes to gain market share in the plant-based foods market dominated by Beyond Meat and Impossible Foods.

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F500-2021-73-Tyson Foods

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G500-2020-287-Tyson-Foods

Tyson CEO Noel White, who was tapped for the top spot in September 2018, made good on his promise to expand into international markets in 2019. The Arkansas-based meat giant acquired the Thai and European operations of Brazilian food processor BRF S.A., giving it a scalable footprint in Asia and across Europe via an array of regional brands, like Grabits, Hot ‘N’ Kickin’ Chicken, Speedy Pollo, and Sadia. The company also launched its Raised &amp; Rooted brand to introduce “value-added protein” options, often in highly specialized forms like plant-based nuggets or blended burgers. The company ended 2019 with $42.4 billion in revenue, a 5.8% increase from 2018. April 2020 presented a brand new challenge, as the company shut down plants temporarily as hundreds of workers tested positive for COVID-19.

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F500-2020-079-Tyson

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Global business is back. After limping through a worldwide financial crisis and economic slowdown, the 500 largest companies ranked by revenues shattered all sorts of performance records in 2013: They racked up combined revenues of $31.1 trillion, up 2.5% from 2012, and profits soared 27% to nearly $2 trillion. China’s 95 companies (up from 89 last year) posted $5.8 trillion in revenues. The U.S. has four fewer companies on the list than last year but remains (for now) the country leader, with 128 corporations on the list—including No. 1 Wal-Mart Stores—reporting $8.6 trillion in revenues. 

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Founded in 1935, Tyson is a global food company that operates in four segments: prepared foods, pork, chicken, and beef. It processes live farm animals, manufactures frozen food, and sells products to retailers and wholesalers.

Q3 2026

Q2 2026

Q1 2026

Q4 2025

Q3 2025

Q2 2025

Q1 2025

Tyson Foods (TSN): Company Profile, Stock Price, News, Rankings

legacy

Tyson Foods

tyson foods

Good morning, everyone, and welcome to the Tyson Foods 4th Quarter 20 24 Earnings Conference Call. All participants will be in a listen only mode. Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Sean Cornett from the Investor Relations team. Sir, please go ahead.

Good morning, and welcome to Tyson Foods' fiscal Q1 2025 earnings conference call. On today's call, Tyson's President and Chief Executive Officer, Donnie King and Chief Financial Officer, Curt Callaway, will provide prepared remarks followed by Q and A. Additionally, joining us today are Brady Stewart, Group President, Beef, Pork and Chief Supply Chain Officer Kyle Naren, Group President, Prepared Foods Wes Morris, Group President, Poultry Devin Cole, President, International and Global McDonald and Melanie Bolden, Chief Growth Officer. We have also prepared a supplemental presentation, which may be referenced on today's call and is available on Tyson's Investor Relations website and via the link in our webcast. During today's call, we will make forward looking statements regarding our expectations for the future.

These forward looking statements made during this call are provided pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward looking statements include all comments reflecting our expectations, assumptions or beliefs about future events or performance that do not relate solely to historical periods. These forward looking statements are subject to risks, uncertainties and assumptions, which may cause actual results to differ materially from our current projections. Please refer to our forward looking statement disclaimers on Slide 2 as well as our SEC filings for additional information concerning risk factors that could cause our actual results to differ materially from our projections. We assume no obligation to update any forward looking statements.

Please note that references to earnings per share, operating income and operating margin in our remarks are on an adjusted basis unless otherwise noted. For reconciliations of these non GAAP measures to the corresponding GAAP measures, please refer to our earnings press release. Now, I'll turn the call over to Donnie.

Thanks, Sean. Fiscal 2025 is off to a solid start. The strong results in the Q1 increased our confidence in the year ahead, enabling us to raise our full year guidance. Our results this quarter were driven by another robust performance in Chicken, highlighted by the best first quarter adjusted operating income for the segment. We delivered better than expected results in beef and significant improvement in profitability in international and other, while Prepared Foods continues to generate solid profits and margins.

Our Q1 performance sets the tone for what we anticipate will be another year of growth for Tyson. This marks our 3rd consecutive quarter of year over year increases across key metrics, including sales, adjusted operating income and adjusted earnings per share. 1st quarter adjusted operating income increased by $248,000,000 a remarkable 60%, while our adjusted operating income margin expanded by 170 basis points versus last year. Adjusted earnings per share grew by an impressive 65%. We ended the quarter with our net leverage ratio at 2.3 times, a notable and delivered accomplishment from 4.1 times at the end of 2023.

In total, our Q1 delivered the best quarterly performance in more than 2 years, while we have managed through ongoing challenges posed by the current cattle cycle. Protein remains at the forefront of consumer preferences based on both per capita consumption data and consumer surveys. While the consumer backdrop remains dynamic, one thing is clear to us, consumers remain focused on prioritizing protein in their diets, recognizing its nutritional benefits and its role in supporting a healthy lifestyle. A recent study by International Food Information Council revealed that 71% of U. S.

Consumers in 2024 thought to increase their protein consumption. This is up from 59% in 2022. Our diversified multi protein portfolio delivered results with chicken helping to offset the ongoing challenges in beef. Through disciplined execution and improved operational performance, we have demonstrated the power of sticking to the fundamentals, fortifying our foundation and controlling what we can. Turning to cash flow and financial strength.

Our Q1 stood out once again. Our disciplined approach to capital expenditures and working capital management has enabled robust cash flow, which we are deploying prudently through investment in the business and dividend. When combined with improving profitability, we sequentially lowered our net leverage ratio and took another step towards our long term target of less than 2x. This strategy ensures we are building financial strength and reinforces our commitment to shareholders. Now let's take a closer look at segment performance.

Prepared Foods is on track for fiscal 2025. We have built our full year improvement plan almost entirely by controlling what we can, such as optimizing our operations, expanding distribution and launching winning innovation. Operationally, we made tremendous progress on our initiatives in the Q1 by outperforming our planned throughput and yield improvements, reducing the impact of distressed inventory and lowering overhead costs. We grew share quarter over quarter in our core 9 categories driven by bacon, snacking and smoked sausage. Growth from innovation continues to drive momentum as well.

While the timing of input cost inflation put pressure on margins in the quarter, our market performance coupled with our improved operational execution, gives us confidence going forward. Our outlook for the year is unchanged. In Chicken, we achieved the best adjusted operating income of any quarter over the past 8 years. Year over year growth in adjusted operating income was driven in part by ongoing improvements at life and plant operations along with lower grain costs. One core component of our strong performance has been the evolution of our commercial relationships to build long term win win partnerships allowing us to jointly grow the category and improve order fill rates for the 2nd consecutive year, all while stabilizing our earnings.

Our customer and consumer obsession will continue to be a cornerstone of our success as we work to exceed their expectations. We have also returned to volume growth in this segment. Importantly, we grew volumes in foodservice where momentum continues to build. We feel good about our leading position in the marketplace and our ability to meet customer and consumer demand. With a healthy start to the year, we are raising our full year adjusted operating income outlook.

Indeed, 1st quarter results were better than expected. We continue to align all aspects of our operations from procurement to distribution with customer and consumer demand, while managing spend, enhancing yield and shifting our mix to more value added products. Challenges from limited cattle supply remain, which along with typical seasonality are expected to impact the Q2 and the year. Therefore, our expectations for fiscal 2025 are unchanged for this segment. In Pork, performance was in line with our expectations.

Higher haul costs led to compressed spreads versus last year. However, our operational improvements around yield, mix and spend continued to deliver results. As we continue through fiscal 2025, our priorities remain clear. 1st, we will continue our focus on cash flow and operational execution. This includes driving innovation and strengthening customer partnerships across all segments, while enhancing product mix, reducing inefficiencies and expanding our market presence.

Operational excellence is at the core of our strategy. We are scaling the enterprise, driving cost savings and addressing inefficiencies boldly to deliver exceptional performance. And we will continue to deliver on taking more cost out in 2025 as the year progresses. Our iconic brands like Tyson, Jimmy Dean and Hillshire Farm continue to resonate with consumers even amidst high inflation and softer category consumption. In fact, nearly 75% of U.

S. Households purchased a Tyson product in the past year and we see significant opportunities to grow our presence in underpenetrated segments as consumers seek to add more protein to their diets. Digital transformation is another key enabler. We continuously work to improve how consumers and customers discover our products by leveraging the power of generative AI. As an example, in our food service channel, we implemented a more intuitive browsing and search experience that delivers highly relevant content.

This enhancement goes beyond influencing purchases. It offers Tyson Foods invaluable insight into the evolving needs of our customers. Capital allocation remains disciplined with a focus on sustaining free cash flow through prudent management of CapEx and working capital. Finally, our team members are our greatest asset. By fostering development and encouraging growth across the organization, we ensure that the right talent and skills are in place now and for the future.

Before handing things over to Kurt, let me say that we are confident in our fiscal 2025 outlook and our long term strategy, powered by the strength of our diversified multi protein portfolio and iconic brands. Our Q1 is another indication of strong execution as we commit to controlling what is within our control as we seek to drive profitable growth over time. We continue to push ourselves to do more and to leave no stone unturned as we strive to be best in class operators. Through innovation, marketing and operational excellence, we are well positioned to generate shareholder value and continue our legacy as a leader in protein and a world class food company. With that, I will turn the call over to Kurt to review our financials in more detail.

Thanks, Donnie. 1st quarter total enterprise net sales grew 2% year over year driven by growth in beef, pork and chicken. Our adjusted operating income increased 60% year over year and adjusted earnings per share grew 65%. It is important to highlight that both adjusted operating income and adjusted earnings per share reached their highest levels in the past 9 quarters, underscoring our team's ability to execute with discipline and deliver results in a dynamic environment. Looking at segment performance, in Prepared Foods, volume in our food away from home channels was relatively flat versus last year.

We like others in the industry continue to navigate a dynamic consumer environment, which primarily impacted our retail volumes and drove the decline in sales. Adjusted operating income decreased primarily due to higher raw material costs, particularly the sharp rise in belly and sow prices in the quarter. We anticipate recovering some of these increases through price pass through. As Donnie mentioned, we made progress on operational improvement initiatives and we continue to repurpose inefficient marketing and promotion support costs, while lapping the impact of start up costs last year. Chicken also continues to be a bright spot in our portfolio with sales increasing due to higher volumes in the foodservice channel where our value added products are gaining traction.

Adjusted operating income almost doubled year over year making this a record Q1 performance and the best quarterly performance in the last 8 years. This was driven by lower input cost, continued strong execution in live operations and improved plant performance. In beef, revenue increased primarily from higher volume, highlighting increased carcass weights and higher head throughput. Adjusted operating income improved due to an increase in our value added mix and an inventory valuation adjustment impacting Q1 last year. Meanwhile, in Pork, revenue grew driven by a higher cutout, though adjusted operating income declined due to compressed spreads partially offset by ongoing operational improvements.

International and other delivered record quarterly adjusted operating income, supported by strong results in Asia along with favorable raw material costs. Turning to our financial position, our disciplined capital allocation priorities remain unchanged. We are focused on maintaining financial strength, investing in business growth and returning cash to shareholders. In the Q1, we generated $1,000,000,000 in operating cash flows. Capital spending remained disciplined and in line with expectations at $271,000,000 leading to free cash flow of $760,000,000 We returned $175,000,000 to shareholders through dividends, which our board increased to a quarterly rate of $0.50 per Class A share, reinforcing our commitment to shareholder returns.

Our net leverage declined to 2.3 times, our 5th consecutive quarter of improvement, and we continued our focus on disciplined cash management. We ended the quarter with $4,500,000,000 in liquidity. Given the cash generation of our business, in January, we paid off the $750,000,000 term loan that was due in 2026 as we prioritize financial strength, our investment grade credit rating and long term shareholder value creation. Now let's take a moment to review our updated outlook for fiscal 2025. Looking ahead, we remain confident in achieving improved financial performance compared to fiscal 2024.

We are raising our sales guidance and now expect to be between flat to up 1%, driven primarily by volume, highlighting healthy demand for protein. Total company adjusted operating income is now raised to be between 1.9 $1,000,000,000 to $2,300,000,000 building on our strong performance in the Q1. We anticipate interest expense of approximately $375,000,000 and a tax rate of around 25%, while maintaining tight CapEx controls between $1,000,000,000 $1,200,000,000 As for free cash flow, we expect typical seasonality in the Q2 and we have updated our full year free cash flow expectations to be in the range of $1,000,000,000 to $1,600,000,000 Now to provide more color on our segments. We are maintaining Prepared Foods adjusted operating income guidance at $900,000,000 to $1,100,000,000 driven by efficiency gains. Unlike typical seasonality, we expect a more balanced first and second half with the first quarter being the lowest quarter of the year due to timing related factors and the ramp up of operational improvements.

As a reminder, our forecast assumes double digit growth at the midpoint enabled by internal initiatives without factoring in or assuming significant changes in consumer behavior. In chicken, given the strong Q1 performance, we are raising adjusted operating income guidance to $1,000,000,000 to $1,300,000,000 as we sustain operational improvements while reinvesting in our value added portfolio and marketing. Our beef guidance remains unchanged with an expected loss of $400,000,000 to $200,000,000 balancing operational improvements against tighter spreads throughout the remainder of the year. Our port guidance also remains unchanged at $100,000,000 to $200,000,000 with ongoing operational improvements offset by tighter spreads. Finally, our international business continues to show momentum and profitability.

Following approximately $50,000,000,000 of adjusted operating income last year, we expect international and other to be between $50,000,000,000 $100,000,000 this year. Now, I'll turn the call back over to Donnie.

Thanks, Curt. I'd like to thank our 138,000 team members across the globe for their hard work and dedication, which drives our success. I'd also like to thank our customers and suppliers for their partnership. By operating as one team, one Tyson, we're off to a great start in fiscal 2025 and have optimism for the year, highlighted by our guidance rate. With increasing consumer focus on protein, combined with our market leadership, strong brand portfolio and operational discipline, we are positioned well for the future.

As always, we remain committed to financial strength, shareholder returns and operational excellence as we execute our strategy. With that, I'll turn things over to Sean as we move to your questions.

Thanks, Donnie. We will now move to your questions. Please recall that our cautions on forward looking statements and non GAAP measures apply both to our prepared remarks and the following Q and A. Operator, please provide the Q and A instructions.

Our first question today comes from Heather Jones from Heather Jones Research. Please go ahead with your question.

Good morning. Congratulations on the quarter.

You're welcome. First thing I was wondering, it was a strong quarter and I was just wondering if you could just outline the things that you're wanting investors to most take away from the call today? And then I have a follow-up.

Sure. And thank you for the question. We're pleased with our Q1 results. We continue to see the benefits of our multi protein, multi channel portfolio. Q1 was the best quarterly performance in more than 2 years and the 3rd consecutive quarter of year over year increases in sales, adjusted operating income and adjusted earnings per share.

Our strategy of fortifying the foundation and growing our branded and value added business is clearly working. In terms of the enterprise priorities for the balance of the year, we will continue to shift our mix to branded and value added and increase household penetration. Protein is part of every healthy diet and consumers are increasing consumption. In fact, 71% of consumers are seeking to increase their protein consumption. We will continue to improve return on invested capital, creating shareholder value.

And we will continue to execute with excellence in everything that we do. In terms of the individual segments, Chicken. Chicken had the best Q1 adjusted operating income performance ever and the strongest quarter in 8 years. We are winning with customers and consumers and we've returned volume growth, particularly in foodservice. In the beef segment, we had better than expected results.

Our view on the year remains unchanged. We are focused on operating efficiently from procurement to distribution, while shifting our mix to more value added. In pork, pork was in line with expectations, enhancing plant efficiency and fortifying the foundation, while shifting their mix to more value added. In Prepared Foods, we're on track for the year. Despite Q1 timing related commodity impacts, we expect counter seasonal performance due to planned phasing.

In international, we had the best ever adjusted operating income, supported by strong results in Asia. So, five key takeaways for you in terms of 2025. Number 1, we are growing profitably, both chicken and prepared foods in FY 'twenty five adjusted operating income growth at double digit rates at midpoint. Number 2, we have reduced gross and net debt while driving net leverage from 4.1 times to 2.3 times over the last 5 quarters. Number 3, we built $4,500,000,000 of liquidity, enabling another $750,000,000 debt reduction in January.

And we're doing all this while managing an unprecedented lease cycle. And 5, finally, we're focused on controlling the controllables, and we're also adapting with agility to manage the impact of tariffs, immigration and market dynamics. We consider these impacts as we raised our guidance by $100,000,000 to a range of $1,900,000,000 to $2,300,000,000 And for your follow-up, Heather?

Thank you for that. And I actually did want to ask on tariffs. So Dante has come out of no specifics to come out of Mexico yet, but there's been reports that they're going to put tariffs on U. S. Pork and then obviously the imports tariffs the U.

S. Put in place affects cost of hogs and cattle. But we I mean we send roughly 10% of every hog to Mexico. So just if you could just go through your operations and how you're thinking about how this net impact is going to play out for you guys. And I think you did say that your guidance gives effect to this.

But if you could just flush that out of how you're thinking about the net impact on Tyson?

Sure, Heather. Let me start off and there may be someone else in the room that would want to add something. But I did mention we considered these risks when we did our R

guidance of $100,000,000 Just how we're approaching this, our teams continuously engage in contingency planning to minimize business disruption from trade or supply chain changes. As we've done in the past, we'll leverage our global expertise to identify the best markets for our products amid evolving conditions. And we've been doing this for 90 years and been navigating various administrations. We remain confident in our ability to adapt and succeed. We look forward to working with the new administration in Congress to support the U.

S. Economy and we'll continue to monitor and respond to new policies accordingly.

Our next question comes from Ben Torra from Barclays. Please go ahead with your question.

Good morning and thanks for taking my question. Congrats first of all on this very strong Q1. Thank you. So actually my main question would have been the one on tariffs. So pretty appreciative.

I think a lot of people had that online. So thanks for those commentaries. So as we put those aside and you've obviously flagged as well the challenges in the current capital cycle being unprecedented. And we have obviously an initial update from USDA just a few days ago. And it doesn't feel like there's much hope maybe in those numbers.

But just wanted to understand what are your first take what is your first take as to the report and what how you think the conditions are for HEPA retention potentially happening and how that then would impact your beef results lower versus higher end of that $200,000,000 to $400,000,000 loss for the year?

Sure. Thanks for that question around beef. I think I will flip this over to Brady and let him give you great detail as it relates to our beef business.

Thanks for the question. And I think it's really important to understand that the beef business has cyclicality in it. And at the top side of these cycles, we see a curve and at the bottom end of these cycles, we see a curve as well. And it really feels like we are at the absolute bottom of the cycle here relative to curve relative to that curve. And there's a few leading indicators that I think are really important to continue to evaluate and it's what we add into our model.

And 1st and foremost, pasture conditions are in an improved state versus the last several years. And so that definitely provides an opportunity for us to increase the herd as we move forward. 2nd, relative to the fact that we have record high live cattle prices and record high live feeder prices, there's profitability to be had by cow calf operators. And so that certainly provides a tailwind as well. The 3rd indicator is what are we actually seeing from a cow harvest perspective.

And we're seeing cow harvest numbers down nearly 19% year over year, which provides some solid base in terms of the beef cow herd as we move forward as well. And then the last thing I think that's really important to acknowledge is the pastures that beef cows graze, their best use has been and will continue to be used as pasture for beef cow production. And when you couple all those things, I think it's just really important to understand that we're at a point in time relative to these inventories, but we have several indicators that are providing us some support that we will see rebuild here in the future.

Okay. Thanks for that, Brady. And then just a quick follow-up. It's more like as you think about the cadence, and I think you mentioned the usual seasonality into 2Q, but you also said maybe first half, second half, a little bit more balanced. Could you give a little bit more detail as to the seasonality on the 4 major segments and the balance between the 4 major segments as you think about it for the year?

I'm having trouble hearing your question.

Okay. Sorry, Mike moved a little bit. No, the question is you said to expect the typical seasonality into the 2nd fiscal quarter, but more or less a more breakeven kind of first half, second half. So could you help us maybe understand on a per segment basis, the 4 major segments as we think about it, what goes into that 2Q And how to think about the second half? If there's any particularity you would like to highlight so we're aware of that into 2Q as we update our assumptions?

Thanks, Ben. This is Kurt. I'll answer that. So I think the most specific one we provided some guidance on was really Prepared Foods where we said that would be a little counter than normal seasonality where we typically would see stronger performance in the front half versus the back half. But this year, we expect to be more balanced across the year really as some of our plans we implement some of the plans relative to efficiencies.

We'll really tilt that a little unusual more to the back half year. I think if you look at the guidance that we provided and particularly the midpoint of each of the ranges, you can come to your own conclusion relative to specifically how Q2 versus a second half would lay out. But broadly speaking, generally Chicken is strongest in Q1 and Q3. Across our Chicken and Beef segments in Pork, we would expect a more normally kind of a little bit of a seasonal challenge in Q2 just

Our next question comes from Andrew Strelzik from BMO. Please go ahead with your question.

Thanks for taking the questions. I had 2. And the first one is digging a little more on what you were saying on the prepared kind of layout for the rest of the year. And I think input costs will continue to

you go forward. And so I'm just kind of curious if you could dig in a little bit more on the pieces or the levers to deliver the guidance that you talked about in terms of pricing and the elasticity that you've been seeing or would anticipate to see? And any color that you can give on kind of the flow of productivity through the year to offset some of those headwinds?

Sure. Good morning, Andrew, and thanks for the question. I'd just remind you in Prepared Foods, we continue to grow distribution in our Prepared business. We have the largest innovation pipeline we've ever had at Tyson in Prepared Foods, and we continue to optimize our operations. So with that, Q1 was we saw a rapid increase in inputs and certainly had an impact, and I talked about that a little earlier.

But let me pass it over to Kyle Nerim and he can give you a little greater detail as it relates to the balance of the year.

Yes. Thanks, Donnie, and thanks, Andrew, for the question. As Donnie mentioned, we built our full year improvement plan on controlling the controllables surrounding growing distribution, launching winning innovation and optimizing our operations. And I would tell you that in Q1, we made tremendous progress in all of those areas. We grew distribution or share 40 basis points quarter over quarter in our key categories.

We continue to be pleased with the performance of our Jimmy Dean Bacon and Hillshire snacking items as both remain 2 of the fastest growing brands in their categories. And we had another great season with consumers on our Jimmy Dean Roll Sausage, where we continue to realize shared growth, as the category leader. Our second initiative was launching winning innovation, and I would tell you we're doing just that. Jimmy Dean Griddle Cakes has surpassed $100,000,000 in the last 52 weeks, which is the first of any launch we've had in the last 6 years. And our chicken biscuit is growing distribution and actually has higher trial and repeat purchase rates than the Griddle Cakes did 6 months through its launch.

We're also excited about the pipeline of additional items that we'll be launching in the back half of the year. And then the 3rd initiative around optimizing our operations, I would tell you we're off to a great start with those initiatives. We remain focused on operating with discipline and establishing standardized processes that allow us to be world class operators. So although we had simply some timing of input cost inflation in the Q1 that put pressure on margins, demand for protein remains strong and we are controlling the controllables. What we're doing is working and I'm confident in our ability to deliver within the guidance range

Okay, great. Thank you for that. And my other question was on the Chicken business and the Chicken outlook, and it was great to see raising the top end of the guidance range there and on the back of the strong quarter that you put up. But I was a little surprised that you didn't they left the bottom end of the range unchanged. And so I guess, can you just kind of walk through some of the factors that kept you from lifting the lower end of the range?

Or maybe some of the risks that you see that would drive you or scenarios that would drive you to

the lower end of the Chicken guidance range? Thanks.

Sure, Andrew. As I mentioned earlier, very proud of what we've been able to do in our Chicken business. I also pointed out that when we did build our plan, we considered all the R and Os that you do as it relates to tariffs, market dynamics and as well as immigration. We've built that in to our model. But we did raise guidance in our chicken business on the top side.

And so let me flip that over to Wes and I know he's been here. He's ready to respond to something. So Wes?

Yes. Good morning, Andrew. Thanks for the question. Let me start by saying I feel really good about the midpoint of the range. Q1 was on plan.

We see solid demand going forward. We're well balanced supply and demand and the industry looks more well balanced than it did earlier in the year. So strong fundamentals, strong customer service and a strong consumer reach program for the balance of the year. It would take a major extraneous event for us to be on the low end, whether it be major weather or bird health issues.

Our next question comes from Peter Galbo from Bank of America. Please go ahead with your question.

Hi, good morning. Thanks for the question. Just wanted to follow-up on Andrew's questions around Prepared Foods. And Kyle, just having been in the seat now for several months, kind of as you take a look at the division with fresh eyes and obviously some of the optimization plans. I mean, are you satisfied with kind of state of the current portfolio, whether that's legacy brands or legacy categories that you may be in that maybe need reevaluation?

Just trying to understand really what the optimization kind of what might look like over the next 12 months and whether there's some reshape activity that needs to happen in there. Again, just as we kind of consider the margin profile in the business, while it's on the right trajectory, it's still trailing the peers pretty meaningfully. So would appreciate kind of more detail there.

Yes. Thanks for the question, Peter. Let me just start by saying I'm very pleased with our iconic brands and product portfolio. Having 3 of the top 10 brands in protein and having category leadership in 8 of the 10 categories we play in is what I would call a world class portfolio. The reason I would remain confident for the balance of the year is because of some

new distribution gains we have in retail that will begin to materialize in the back half of the year. Our performance in Foodservice continues to outpace the industry. We continue to see growth in broad line distribution and commercial chains. And as I mentioned previously, we continue to see the benefit of our robust innovation pipeline and we expect to continue to build on the remarkable success of our Jimmy Dean Griddle cake and chicken biscuit. So yes, as mentioned before, we did see some margin pressure in Q1 due to input costs.

But as stated, we're controlling the controllables. We're executing the plan that we've laid out as part of our multi year strategy. We'll continue to focus on growing quality share with consumers and customers. We'll continue to launch world class innovation and we'll be world class operators in our assets.

Got it. Thanks for that. And Donnie, I think probably the market this morning is looking for a bit more detail as it relates to tariffs. I know Heather asked the question, but anything more you can provide just how you see the moving pieces and there are quite a bit of them by protein across beef, pork and chicken, even if it's at a high level. And it's encouraging to hear you're going to work with the administration, but but just how you see the trade dynamics kind of unfolding even if it's in the very near term?

Sure. I will take another shot at that. And in terms of Mexico, the product that we have going in there, the concern and what we've been contingency planning on is pork. We also have chicken, really a couple of parts of chicken. We have mechanically separated chicken.

We have chicken leg quarters going into Mexico. Mexico is the large trading partner for us. So essentially what we would do, whether it be pork or whether it would be chicken, is we would find other markets. We would leverage our global knowledge and expertise to try to move those products if necessary. But we saw the information over the weekend.

There's still some details to be worked out in that from what I have seen. But what I would tell you as it relates to Mexico and you could say the same about Canada. In Canada, you have some we have some chicken products, but it's very small going into Canada. It's predominantly heavy pile going into Canada. We have some feeder cattle and some hogs coming into the U.

S. Out of Canada. So depending on what happens there, we would adjust accordingly. But we've been preparing for this, making adjustments. We now have to execute some of those things.

But we think we have risk adjusted in our guidance the

Tyson Foods (TSN) Q1 2025 Earnings Call Transcript

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