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Mar 28, 2020
Tyson Foods Q2 2020 Earnings Report
Tyson Foods reported record sales and beef results.
Key Takeaways
Tyson Foods reported record total Company sales of $10.888 million. The company faced challenges including a shift in demand from foodservice to retail, temporary plant closures, and supply chain volatility, but was able to adjust their product mix.
GAAP EPS of $1.00, down 15% from prior year; Adjusted EPS of $0.77, down 36% from prior year
GAAP and Adjusted operating income of $501 million
Total Company GAAP and adjusted operating margin of 4.6%
Record total Company sales of $10,888 million
Tyson Foods
Tyson Foods
Tyson Foods Revenue by Segment
Revenue by Segment
Beef Revenue
CapyFin.comPork Revenue
CapyFin.comChicken Revenue
CapyFin.comPrepared Foods Revenue
CapyFin.comInternational/Other Revenue
CapyFin.com Forward Guidance
The company expects challenges related to the pandemic to increase operating costs and negatively impact volumes for the remainder of fiscal 2020. Operationally, they anticipate slowdowns and temporary idling of production facilities from team member shortages or choices they make to ensure operational safety. They are currently unable to provide segment adjusted operating margin guidance due to the uncertainty of the COVID-19 impacts to operations.
Positive Outlook
- Industry fed cattle supplies are expected to increase approximately 2% in fiscal 2020 as compared to fiscal 2019.
- Ample cattle supplies are expected in regions where plants operate, and profitability is expected to remain strong.
- Industry hog supplies are expected to increase approximately 5% in fiscal 2020 as compared to fiscal 2019.
- Decreased livestock costs are expected as compared to the same period in fiscal 2019, and export markets are expected to become more available.
- Overall raw material costs are expected to decrease through the remainder of fiscal 2020 as compared to the same period in fiscal 2019.
Challenges Ahead
- Challenges related to the pandemic are anticipated to increase operating costs and negatively impact volumes for the remainder of fiscal 2020.
- Slowdowns and temporary idling of production facilities are expected from team member shortages or choices made to ensure operational safety.
- Lower levels of productivity and higher costs of production are likely to continue in the short term until the effects of COVID-19 diminish.
- Volume increases in retail have not been sufficient to offset the losses in foodservice, and as a result, decreases in volumes are expected in the second half of fiscal 2020.
- Improved results from foreign operations in the first six months of fiscal 2020 are expected to be challenged in the back half of fiscal 2020 due to market conditions associated with COVID-19.