Tyson won't be good until Beef is a good seller

Tyson Foods (TSN) reported a mixed Q4 (ending in October) financial report, with slight pullback in trading on the day.

Revenue decreased 2.8% YoY to $13.35 billion, below market expectations of $13 billion, mainly due to a 0.6% decline in sales volume and a 1.4% lower pricing compared to a year ago.

Similar to the previous quarter, sales volume increased in the chicken and processed food departments (as they are cheaper), while sales volume continued to decline in the beef and pork departments (as they are more expensive).

The pricing for the beef department was 10% higher than the same period last year, but pricing for all other departments was lower. This indicator matches current food inflation and the consumption situation of excess savings by US residents. Excess savings of low-income families have been almost depleted.

In terms of profit, the operating profit margin fell to 1.8%, compared to 6.0% in the same period last year. The operating profit margin of the processed food department was the highest at 6.0%, while the operating profit margin of the pork department was -0.5%.

As for guidance, the company expects revenue to remain relatively stable (flat YoY) for FY24, between $10 billion and $15 billion. FY24 capital expenditures will be between $1 billion and $1.5 billion, including investment in profit improvement projects and maintenance and repair projects. This includes completing expansion projects and new equipment; automation technology; and product innovation processes.

It is worth noting that domestic beef production is expected to decline in FY24.