US: Tyson "optimistic" about fiscal 2013
Tyson said it expects to continue its strong performance in the back half of the year
US meat giant Tyson Foods has said it is "optimistic" about its fiscal 2013 results, despite a second-quarter that was "more challenging than anticipated".
Speaking at the Goldman Sachs 17th Annual Agribusiness Conference, Tyson COO James Lochne said margins had been compressed throughout the past month, particularly in its beef and pork segments. He added that the value of beef had fallen more than the price of cattle, also hitting margins.
"Historically, adjustments occur that allow for a spread between the revenue and the cattle cost. We run our plants for margin, not market share," he said.
Nonetheless, Lochner said the company expects to continue its strong performance in the back half of the year and is "optimistic" about its results for the full year.
Looking to fiscal 2014 and beyond, Tyson said it expects total company top-line sales to grow 3% to 4% annually and value-added sales to grow between 6% and 8%.
The company also plans to focus on improving international sales in Brazil, China, India and Mexico.
Earlier this month, Tyson said fiscal 2013 was off to "a good start" after it booked an increase in first-quarter earnings. Last week it announced the acquisition of local tortilla, salty snack and pretzel maker Don Julio Foods.
Tyson Remains Optimistic About FY2013 Results Despite Near-Term Challenges NEW YORK, Feb. 26, 2013 (GLOBE NEWSWIRE) -- Tyson Foods, Inc. (NYSE:TSN) today told investors at the Goldman Sachs 17th Annual Agribusiness Conference that its second fiscal quarter has been more challenging than anticipated due to margin compression in its Beef and Pork segments; however, the company remains optimistic about its results for the full year.
James Lochner, Tyson's chief operating officer, said, "Margins have been compressed throughout the past month as the value of beef has fallen more than the price of cattle. Historically, adjustments occur that allow for a spread between the revenue and the cattle cost. We run our plants for margin, not market share."
Tyson's pork business also experienced some margin compression in the current quarter, although there have been signs of improvement recently, Lochner said. "We expect to continue our strong performance in the back half of the year," he said.
Meanwhile, Tyson's Chicken segment has continued to do well. The company has said it expects a strong performance, particularly in the second half of the fiscal year, leading to continued optimism that the company's full-year results will be better than fiscal 2012.
"Demand is strong, and we're seeing signs of consumers trading from beef to chicken," Lochner said. "Even with pricing up substantially year over year, chicken is a good value for consumers, and food service continues to promote chicken heavily."
Lochner announced that Tyson is launching a new line of all natural chicken under the new NatureRaised Farms™ brand. The product line will include a variety of fresh products produced from cage-free chickens raised without the use of antibiotics or added hormones and fed a 100% vegetarian diet. NatureRaised Farms™ brand fresh chicken will be available for sale to retailers in April, and is just one example of how the company is growing offerings in higher margin, value-added products.
Dennis Leatherby, Tyson's executive vice president and chief financial officer, told investors at the conference there is value in the diversity of Tyson's multi-protein, multi-channel, multi-national business.
"We're going to grow sales of domestic value-added chicken and prepared foods," Leatherby said. "We're not a commodity protein company. That's not our goal, nor our destiny. Value added is currently about a third of our sales, which includes food service as well as branded retail products. Looking ahead to 2014 and beyond, we expect total company top-line sales to grow 3-4% annually, and value-added sales should grow 6-8% a year. We expect sales from international production to grow at an annual rate of 12-16%. International growth is focused on production and further processing in Brazil, China and India, in addition to our long-standing poultry business in Mexico. We're able to execute this growth strategy because we have a strong capital structure, and that creates opportunities for us."
About Tyson Foods
Tyson Foods, Inc. (NYSE:TSN), founded in 1935 with headquarters in Springdale, Arkansas, is one of the world's largest processors and marketers of chicken, beef and pork, the second-largest food production company in the Fortune 500 and a member of the S&P 500. The company produces a wide variety of protein-based and prepared food products and is the recognized market leader in the retail and foodservice markets it serves. Tyson provides products and services to customers throughout the United States and approximately 130 countries. The company has approximately 115,000 Team Members employed at more than 400 facilities and offices in the United States and around the world. Through its Core Values, Code of Conduct and Team Member Bill of Rights, Tyson strives to operate with integrity and trust and is committed to creating value for its shareholders, customers and Team Members. The company also strives to be faith-friendly, provide a safe work environment and serve as stewards of the animals, land and environment entrusted to it.
The Tyson Foods, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3224
Forward Looking Statements
This release includes forward-looking statements as well as historical information. These forward-looking statements may include statements relating to domestic and international growth and cattle and hog supplies. Actual results may vary. Factors that could cause actual results to differ from those in the forward-looking statements include, but are not limited to: consumer demand and perceptions; the availability of raw materials; customer requests and requirements; and the ability to compete in products and prices in a competitive industry.
CONTACT: Investor Contact: Jon Kathol, 479-290-4235 Media Contact: Gary Mickelson, 479-290-6111
Original source: Tyson Foods
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