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Apr 03, 2021
Tyson Foods Q2 2021 Earnings Report
Tyson Foods' performance was driven by strong results in the Prepared Foods and Beef segments.
Key Takeaways
Tyson Foods reported a strong second quarter in a complex operating environment, driven by success in retail and improvements in foodservice. The company saw adjusted operating income growth, particularly in the Beef and Prepared Foods segments, but anticipates margin pressure due to inflation across the supply chain.
GAAP EPS of $1.30, up 26% from prior year; Adjusted EPS of $1.34, up 68% from prior year
GAAP operating income of $720 million, up 40% from prior year; Adjusted operating income of $739 million, up 43% from prior year
Total Company GAAP operating margin of 6.4%; Adjusted operating margin of 6.5%
Liquidity of $2.6 billion at April 3, 2021
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
Tyson Foods expects sales to approximate $44 billion to $46 billion for fiscal 2021. Capital expenditures are expected to be at the lower end of the $1.3 billion to $1.5 billion range. Net interest expense is expected to approximate $420 million for fiscal 2021. The adjusted effective tax rate is expected to be around 23% in fiscal 2021.
Positive Outlook
- USDA projects domestic beef production will increase nearly 3% in fiscal 2021 as compared to fiscal 2020.
- We expect improved results from our foreign operations in fiscal 2021.
- Sales are expected to approximate $44 billion to $46 billion for fiscal 2021, reflecting the pass through of rising costs and continued strength in beef markets.
- Liquidity is expected to remain above our minimum liquidity target of $1.0 billion.
- Capital expenditures include spending for capacity expansion, growth, safety, animal well-being, infrastructure replacements and upgrades, and operational improvements that are expected to result in production and labor efficiencies, yield improvements and sales channel flexibility.
Challenges Ahead
- USDA projects slightly lower chicken production in fiscal 2021 as compared to fiscal 2020.
- At current grain prices, we believe Chicken results will likely be lower in fiscal 2021 as compared to fiscal 2020.
- Pork results will likely be lower in fiscal 2021 as compared to fiscal 2020.
- We estimate that we will incur approximately $365 million of direct incremental expenses associated with the impact of COVID-19; however, some of these incremental expenses may become permanent over time.
- We are experiencing multiple challenges related to the pandemic. These challenges are anticipated to increase our operating costs and negatively impact our volumes in fiscal 2021.