The chief of Tyson Foods has insisted he is “encouraged” by the direction the US meat group is heading in despite reporting a loss for the first nine months of its fiscal year.
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Speaking at a conference call following the publication of Tyson’s third-quarter results, interim president and CEO Leland Tollett said the company’s prepared foods business is doing well and its chicken business is “rapidly making progress”.
Tollett also said that consumers trading down had not hit the business yet.
“Lunchmeat demand is up just a little bit so obviously that’s helped us. In terms of the trade down, I don’t know whether private-label’s share has changed dramatically so we’ve got a good solid business,” Tollett said.
“We’ve talked about our projects, consolidating locations and equipment to run more efficiently, which should be completed by the end of quarter, and that should have a good impact on the business going forward.”
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By GlobalDataTyson today (3 August) posted a loss for the first nine months of the year.
The company recorded a net loss of US$82m, despite posting a profit of $38m in the same period of 2008.
Sales also dipped, to $19.5bn from $19.6m in the comparable period of the previous year. Operating income was down for the period, to $107m from $193m in 2008.
For the third-quarter profit rose to $134m from $9m a year earlier. Revenue declined to $6.66bn from $6.85bn.
Speaking to analysts, Tollett said the company was taking less risk than it has done in the past.
“Quarter-on-quarter we will continue to do that, we will manage this business on a shorter-term proposition than we’ve had in the past. We’re going to stay close to the market and also close to the market in terms of going to the market place for finished product.
He added that the company would continue to shorten prices.
“If we continue to hold our pricing in a fairly narrow window when the commodity prices recover, we are in a better position to recoup that cost in our pricing. I can’t tell you what grain costs will be next year, it looks good so far but there are lots of factors in that. Our job is to operate our business well, keep our costs in line and make sure we shorten up our pricing so that when markets do react we are able to respond to that as quickly as we can in the market place.
He added: “We will produce according to our demand. We have no real thoughts about what the rest of the industry is doing right now. We still have opportunities in front of us, we’ve come a long way but we’ve got a lot more work to do. We’re somewhere in the middle of the journey.”
