Tyson Foods is expecting to post a steeper annual loss in beef than it originally anticipated as cattle shortages persist.
Reporting third-quarter and nine-months results today (3 August), the US meat giant updated its guidance for the adjusted operating loss for its beef segment in fiscal 2026 to a range of $500-650m.
As a consequence, the total adjusted operating profit for the group is predicted to be below its previous expectations of $2.1bn to $2.3bn, compared to the $2.2bn to $2.4bn outlined at the second-quarter results stage in May.
At that point, beef was forecast to deliver a loss in operating profit of $350-500m.
In an accompanying presentation issued alongside today’s numbers, New York-listed Tyson Foods noted beef margins were “pressured by higher cattle costs, driven by lower cattle availability”.
Shortages of cattle have plagued the US beef industry, while prices on-shelf for consumers have continued to rise.
In February, when Tyson Foods issued its first-quarter results, its president and CEO Donnie King said cattle supplies are likely to remain “tight” through 2026 and into next year.
Tyson Foods also took a hit to beef volumes in the third quarter and year to date, while the operating margins for the segment remained in the red.
Beef volumes dropped 15.9% for the quarter and 12% over the nine months.
The company reported an operating loss of $142m for beef versus a loss of $459m in the corresponding period a year earlier. Year-to-date losses were little changed at $701m, compared to a $707m loss.
On an adjusted basis, operating losses for the quarter in beef widened to $138m from $116m and over the nine months to $483m from $223m.
The operating margin was negative 2.6%, improving from negative 8.2% a year earlier. For the year so far, the margin was -4.3% versus -4.4% the year previous.
In adjusted terms, the third-quarter margin was -2.6% versus -2.1% a year earlier. It was -2.9% year-to-date compared to -1.4% in the corresponding period.
Tyson Foods has also tweaked its annual sales revenue growth guidance for the group as a whole to a range of 2.5% to 3.5%, from 2% to 4% previously.
Third-quarter sales revenue was flat at $13.87bn, while it rose 3.1% year-to-date to $41.83bn.
Group operating income increased 39% to £362m in the quarter and was up 17% at $1.1bn year to date. It climbed 8% on an adjusted basis to $547m but dropped 4% over the year so far to $1.62bn.
Net income per share delivered $0.52 for shareholders, compared to $0.17 in the year earlier third quarter. Year to date, the metric stood at $1.49 versus $2.97.
In adjusted terms, net income per share rose 9% to $0.99. However, it dropped 5% over the nine months to $2.83.
On a brighter note, the sales outlook for the Arkansas-based company’s prepared foods business was beefed up to $1.30-1.35bn. The prior outlook was $1.25-1.35bn.
Sales for that division climbed to $2.56bn in the third quarter from $2.52bn a year earlier and came in at $7.74bn for the year so far versus $7.38bn.
King, who is giving over the president and CEO seats to Jeff Schomburger in October, said: “We delivered strong third-quarter results, fuelled by continued strength in our chicken and prepared foods segments, with seven consecutive quarters of growth in chicken and continued market share gains by our iconic brands.
“We remain confident in our ability to deliver long-term growth and create value for shareholders through disciplined execution of our branded food products strategy.”
Third-quarter beef sales were $5.39bn, down from $5.6bn. They edged up to $16.37bn year to date from $16.13bn.
Tyson Foods delivered $4.26bn in chicken sales for the quarter, compared to $4.22bn. Nine-month sales revenue was $12.75bn versus $12.43bn a year earlier.
