Tyson Foods Q3 2021 Earnings Report
Key Takeaways
Tyson Foods reported a strong third quarter with increased sales and volume growth, driven by strong consumer demand and the reopening of the restaurant industry. The company also reduced debt and invested in future growth.
GAAP EPS of $2.05, up 42% from prior year; Adjusted EPS of $2.70, up 93% from prior year
GAAP operating income of $1,062 million, up 37% from prior year; Adjusted operating income of $1,372 million, up 81% from prior year
Total Company GAAP operating margin of 8.5%; Adjusted operating margin of 10.8%
Liquidity of $3.4 billion at July 3, 2021
Tyson Foods
Tyson Foods
Tyson Foods Revenue by Segment
Forward Guidance
Tyson Foods expects sales to approximate $46 billion to $47 billion in fiscal 2021. Capital expenditures are expected to be approximately $1.3 billion. Net interest expense is expected to approximate $420 million. The adjusted effective tax rate is expected to be around 22.5% in fiscal 2021.
Positive Outlook
- USDA projects domestic beef production will increase approximately 3% in fiscal 2021 as compared to fiscal 2020.
- We expect improved results from our foreign operations in fiscal 2021.
- Capital expenditures are expected to result in increased capacity, production and labor efficiencies, yield improvements and sales channel flexibility.
- We expect total liquidity to remain above our minimum liquidity target of $1.0 billion.
- Because of stronger than expected performance in beef and current market conditions, we expect Beef to deliver improved fiscal 2021 results as compared to fiscal 2020.
Challenges Ahead
- USDA projects chicken production will decrease less than 1% in fiscal 2021 as compared to fiscal 2020.
- USDA projects domestic pork production will be relatively flat 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.
- On an adjusted basis, we anticipate Prepared Foods results in fiscal 2021 to be similar to fiscal 2020, and Pork results will likely be lower in fiscal 2021 as compared to fiscal 2020.
- We estimate that we will incur approximately $325 million of direct incremental expenses associated with the impact of COVID-19; however, some of these incremental expenses may become permanent over time.