Tyson Foods nine-month sales were up but net profit dropped

Tyson Foods nine-month sales were up but net profit dropped

Tyson Foods has named Dean Banks as the successor to chief executive Noel White, who will remain with the US meat giant in a new capacity.

Banks will become CEO from 3 October, while White will fill a new role as executive vice chairman of the board, Tyson said today, as it also reported a 0.6% increase in nine-month sales to US$31.7bn.

The appointment of Banks is "part of the board's deliberate, long-term succession planning", Tyson said. He joined the business as a director in 2017 and went on to become a divisional president last year.

Board chairman John Tyson said: "The board and I are truly excited about the breadth and depth of capabilities of Dean and the entire executive leadership team, and we look forward to the energy and vision they will bring in leading Tyson Foods into the future."

White has been with Tyson for 37 years and has filled the CEO seat for the past two.

"He has an unparalleled knowledge of the protein industry and our business, and he has earned the trust and admiration of our team members and our company leaders, many of whom he has mentored," chairman Tyson added.

Commenting on the third-quarter and nine-months results issued today, White said: "Without a doubt, our third fiscal quarter was one of the most volatile and uncertain periods I've seen during my time in the industry.

"Within each of our segments, we absorbed higher-than-normal operating costs related to Covid-19. Nonetheless, Tyson delivered strong results during the third quarter led by strength in our beef and pork segments. Our fourth quarter is off to a solid start, and while Covid-19 has been disruptive, we have a strong long-term outlook for Tyson Foods."

Elsewhere in the earnings, operating income dropped 5% to $2.10bn, while adjusted, it was down 6% at $2.16bn. Net income attributable to Tyson fell 14% to $1.45bn.

Tyson described the challenges it has faced during the pandemic and what the company expects going forward.

"These challenges are anticipated to increase our operating costs and negatively impact our volumes for the remainder of fiscal 2020 and into fiscal 2021. The lower levels of productivity and higher costs of production we have experienced will likely continue until Covid-19 is better understood and its impacts diminish.  

"Each of our segments has also experienced a shift in demand from foodservice to retail; however, the volume increases in retail have not been sufficient to offset the losses in foodservice and as a result, we expect decreases in volumes in the last quarter of fiscal 2020 in our chicken and prepared foods segments. 

"We cannot currently predict the ultimate impact that Covid-19 will have on our short- and long-term demand, as it will depend on, among other things, the severity and duration of the Covid-19 crisis. Our liquidity is expected to be adequate to continue to run our operations and meet our obligations as they become due."