Tyson collapses after cutting sales outlook amid higher meat costs

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(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. 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,” 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.

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(Updates shares and adds comment from CEO in third paragraph.)

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