Top U.S. meatpacker Tyson Foods Inc. beat quarterly profit estimates on Monday and forecast fiscal 2022 revenue above market expectations on rising meat prices and improving demand from restaurants that have reopened after COVID-19 restrictions.
The Springdale, Arkansas-based company reported a double-digit jump in sales and earnings in the fiscal fourth-quarter ended Oct. 2.
“We delivered a record performance in our beef segment and experienced share gains in our retail core business lines … while supporting the continued recovery in foodservice,” CEO Donnie King said.
Pent-up demand for dine-in experiences, newer meat items on restaurant menus, and a boom in Chinese demand for U.S. pork and beef have worked in favor of American meat processing firms.
Increased costs for labor, transportation, and items such as feed grain and packaging have created headaches, however.
Tyson reported about $335 million in direct costs in fiscal 2021 related to COVID-19, including protective equipment, testing, and vaccinations for employees. The total did not included indirect costs such as higher meat product inputs, transportation, and plant inefficiencies that have sent consumer meat prices soaring.
Top aides to President Joe Biden blamed Tyson and other large meat rivals that control much of the meat processing sector for rising food prices.
Tyson has rejected those assertions and instead blamed the pandemic and the U.S. labor shortage for limiting production.
The Jimmy Dean sausages maker said it was expecting sales to be about $49 billion to $51 billion for fiscal 2022, compared with market estimates of $47.99 billion, according to Refinitiv IBES.
Sales rose to $12.81 billion in the fourth quarter from $11.46 billion a year earlier. Analysts on average were expecting sales of $12.66 billion, according to Refinitiv IBES.
Net income attributable to Tyson increased to $1.36 billion, or $3.71 per share, from $654 million, or $1.79 per share, a year earlier.
Excluding one-off items, Tyson earned $2.30 per share, compared with estimates of $2.03.
By Karl Plume and Praveen Paramasivam