Tyson Foods has cut its forecasts for sales and profits again, a month after warning that persistent cattle shortages would deepen losses in its beef business.
In a statement yesterday (3 September), the US meat group said the revised guidance reflects “additional pressure” in its beef segment in the fourth quarter.
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Tyson said it is facing “significant margin compression amid volatile cattle prices and one of the most severe cattle shortages in US history, as well as the expected impact of lower cattle prices on the value of live cattle inventories”.
The Hillshire Farm brand owner expects its revenues to grow 1.5% to 2%, down from a 2.5% to 3.5% increase outlined with its third-quarter results on 3 August.
Tyson is now forecasting its adjusted operating income to be between $1.85bn and $2.05bn, compared to the prior expectation of $2.1bn to $2.3bn.
The biggest downgrade came in beef. Tyson expects an adjusted operating loss in the range of $625m to $775m in the segment, versus the $500m to $650m loss flagged in August.
President and CEO Donnie King said: “The beef pressures that have intensified this quarter reflect industry-wide cattle-cycle dynamics that required decisive action.”
The warning comes on the heels of Tyson’s decision to consolidate its US beef network.
The group is closing a beef plant in Joslin, Illinois and a case-ready facility in Eagle Mountain, Utah. The company is selling a beef facility in Pasco, Washington.
Announcing the move on 13 August, Tyson said it would anchor the business around three sites in Dakota City, Nebraska; Holcomb, Kansas; and Amarillo, Texas.
“We expect these actions to begin reducing operating cost pressures as we enter fiscal 2027,” King added in the latest statement.
Furthermore, the downgrade comes after the US government moved on 21 August to suspend out-of-quota tariffs for 90 days on up to 300,000 tonnes of imported product used for ground beef.
Outside beef, Tyson narrowed its guidance for the adjusted operating income from its chicken business to $1.85bn to $1.95bn and forecast pork at $200m to $250m.
Guidance for the company’s prepared foods and international divisions was maintained, with the group saying the former “continues to perform well” and the latter is delivering “as expected”.
King said Tyson’s “diversified, multi-protein portfolio” would help manage commodity cycles, adding that the company remains focused on “operational execution, brand investment, innovation and deeper strategic customer relationships”.
