(Bloomberg) — Tyson Foods Inc posted its biggest decline since March 2020, after America's biggest meat company cut its full-year sales forecast amid what it described as “challenging” market conditions.
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The company said it now sees revenue of $53 billion to $54 billion this year, down from its earlier estimate of $55 billion to $57 billion. The midpoint of Tyson's revised range is below the minimum analyst estimate compiled by Bloomberg. shares fell 13% to $52.78, their lowest since April 2020 in New York at 9:34 a.m. ET.
“I cannot remember a time when our business has faced the highly unusual situation that we are currently seeing, where all three of our main protein categories – beef, pork and chicken – at the same time facing market challenges,” chief Executive Officer Donnie King said on the company's second-quarter earnings call on Monday.
Tyson and other meat producers have been squeezed by record-high cattle costs and high animal feed prices, as inflation-hit consumers are trading up cheaper foods. That's a change from recent years, when disruptions linked to the Covid-19 outbreak cost meat companies record profits.
“Challenging protein-market fundamentals and weaker-than-expected volumes mean adjusted operating margins in beef, pork and chicken should continue to improve,” Jennifer Bartschus, senior industry analyst at Bloomberg Intelligence, said of Tyson's second-quarter earnings on Monday. could be worse before.” ,
Tyson announced last month that it was cutting 10% of its corporate staff and in March said it was closing two underperforming poultry operations to strengthen its chicken segment. The company reported an increase in poultry sales and a 2.9% decline in beef sales in the second quarter, according to its earnings report. Pork prices have dropped by more than 10 per cent.
(Updates shares and adds comment from CEO in third paragraph.)
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