Tyson Foods has added $100m to its group operating profit outlook for the year but expects losses from beef to be steeper than initially anticipated.
The US-based meat giant now expects adjusted operating profit in a range of $2.2bn to $2.4bn, up from its original forecast of $2.1-2.3bn.
“Strong” chicken sales in the second quarter of Tyson Foods’ 2026 fiscal year have led to the upgrade, with an additional $200m slapped onto the adjusted operating income outlook for that segment to $1.9-2.05bn.
Beef suffered again in the quarter to 28 March as cattle supply shortages continue, with volumes down 13.1% and 10.1% for the first half.
As a consequence, beef is expected to report losses in adjusted operating profit of $350m to $500m, compared to a previous estimate for losses of $250m to $500m.
Addressing analysts yesterday (4 May), president and CEO Donnie King said group-wide adjusted operating profit is “trending toward the upper end” of the forecast range with the second-half performance likely to be better than the first, when the metric dropped 9% to $1.07bn.
King also gave an essence of the pressures Tyson Foods is already seeing from the crisis in the Middle East.
“We’re seeing inflation pressures across multiple input categories,” he told analysts. “With respect to freight and diesel, costs are up versus the prior year.
“Commodity raw materials, and think, pork, beef, turkey inputs into our prepared foods are higher. For example, just to give you a number, prepared foods commodity costs were up $50 million in Q2, and year to date $150 million. Our pricing continues to catch up with those raw materials.”
One positive for beef was the right-sizing of Tyson Foods production footprint with the closure of its Lexington, Nebraska, facility and scaled back operations at the Amarillo plant in Texas.
Chief operating officer Devin Cole said: “Our updated operational footprint is aligning with lower cattle availability and we are seeing the benefits of a higher capacity utilisation.
“While the quarter included variability in industry conditions, we believe the harvesting plan adjustments better position us to compete effectively this year and over the long term with the right size production footprint.”
Total sales across all protein segments are still expected to rise 2-4% in fiscal 2026.
The outlook for adjusted operating income for pork was also left unchanged at
$250-300m and for prepared foods $1.25bn to $1.35bn. Guidance for the international division remains at $150-200m.
King also provided some insight on how Tyson Foods is leveraging AI as year-to-date group sales rose 4.8% to $27.97bn. EPS, however, fell 11% to $1.84.
“In terms of how we’re driving innovation in our portfolio, we are using AI-driven insights that sharpen how we identify emerging preferences and translate them into action,” King said. “This enables us to bring on-trend consumer-led products into the marketplace.”
He explained further: “In practice, the integration of AI allows us to better connect what consumers are telling us with what shows up on shelves and menus. The capability is accelerating our innovation pipeline, improving decisions around distribution and pricing, and strengthening the effectiveness of marketing and new customer acquisition.”
