US meat giant Tyson Foods has downgraded its fiscal 2019 outlook because of what it describes as “short-term challenges” affecting fourth-quarter earnings.
It revised the full-year adjusted earnings guidance to a range of US$5.30 to $5.70 a share, down from $5.75 to $6.10 previously.
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In a statement issued yesterday (3 September), Tyson outlined the problems it is facing, which include a recent fire at a meat plant in Holscomb, Kansas.
“These challenges include margin compression related to a reversal of a gain on mark-to-market grain derivatives recognised in our third quarter, commodity market volatility, implementation of enhanced food safety initiatives, a beef processing plant fire and slower-than-expected operational improvements in the chicken segment.”
Noel White, Tyson’s president and CEO, said: “The discrete challenges we’ve encountered this quarter now lead us to believe we will fall short of our previously-stated guidance but our outlook for fiscal 2020 remains positive as we believe some of the challenges we’re experiencing are not expected to repeat, and we’re expecting more favourable market conditions as well.
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“Our portfolio is structurally sound and generating strong sales volumes. Our volumes are strong in the back-to-school season while our case-ready beef and pork business continues to grow. Our international business is exceeding expectations as our legacy business outperforms the prior year and we continue to integrate Keystone and the newly-acquired Thai and European assets.
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By GlobalData“Our diversified portfolio is uniquely suited to respond to dynamic and challenging market conditions, and we continue to expect better performance in fiscal 2020. We’re very optimistic about our long-term potential as we focus on prepared foods growth, international growth and serving our customers.”
Last week, Tyson announced it had taken a 40% stake in Brazilian poultry business Grupo Vibra for an undisclosed sum.
