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Tyson Foods (TSN) Q2 Earnings Top Estimates, Sales Up Y/Y
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Tyson Foods, Inc. (TSN - Free Report) posted impressive second-quarter fiscal 2022 results, with the top and the bottom line increasing year over year. Sales and earnings surpassed the Zacks Consensus Estimate. Management highlighted that better operational execution and solid customer and consumer demand for its brands and products are contributing to the upside. Management raised its fiscal 2022 sales view.
Adjusted earnings came in at $2.29 per share, beating the Zacks Consensus Estimate of $1.83. The bottom line rallied 71% year over year.
Total sales came in at $13,117 million, up 16.1% from $11,300 million reported in the year-ago quarter. The top line surpassed the Zacks Consensus Estimate of $12,432.3 million. Gains from average price change were 17.6%, while total volumes inched down 1.5%.
Gross profit in the quarter came in at $1,735 million, up from $1,253 million reported in the prior-year quarter. Gross profit, as a percentage of sales, came in at 13.2%, up from 11.1% reported in the year-ago quarter. Tyson Foods’ adjusted operating income increased 57% to $1,161 million. Adjusted operating margin expanded to 8.9% from 6.5% reported in the year-ago quarter.
Segment Details
Beef: Sales in the segment increased to $5,034 million from $4,046 million reported in the year-ago quarter, on solid global demand. These were somewhat offset by a challenging labor environment and ongoing supply chain constraints. Volume inched up 0.6% and the average price increased 23.8% in the segment.
Pork: Sales in the segment increased to $1,565 million from $1,477 million reported in the year-ago quarter. Sales volume declined 4.8%, mainly owing to the adverse impacts stemming from the tough labor environment.The average price increased 10.8% owing to increase input costs like live hogs, labor, freight and transportation costs. These were somewhat offset by an unfavorable mix related to labor shortages.
Chicken: Sales in the segment increased to $4,086 million from $3,553 million reported in the year-ago quarter. Sales volume inched up 0.6%, mainly driven by a solid demand environment somewhat offset by supply chain constraints. The average price increased 14.4% on the impacts of pricing actions undertaken amid the inflationary cost environment.
Prepared Foods: Sales in the segment rose to $2,393 million from $2,164 million reported in the year-ago quarter. Prepared Foods’ sales volume declined 5.3%, thanks to reduced production throughput stemming from tough labor and supply environment as well as uneven foodservice recovery. Divestiture of its pet treats business (concluded in fourth-quarter fiscal 2021) also hurt the metric. The average price increased 15.9%, mainly owing to the effects of revenue management through an inflationary cost environment and a positive product mix.
International/Other: Sales in the segment were $565 million, up from $487 million reported in the year-ago quarter. Volume moved up 5.1%, while average sales price jumped 10.9%.
Other Financial Updates
The company exited the quarter with cash and cash equivalents of $1,151 million, long-term debt of $8,270 million and total shareholders’ equity (including non-controlling interests) of $19,156 million. In six months ended Apr 2, 2022, cash provided by operating activities amounted to $1,224 million.
Liquidity was $3.4 billion as of Apr 2, 2022. Management expects liquidity to remain above the company’s minimum target of $1 billion. The company projects capital expenditures to be nearly $2 billion for fiscal 2022.
Image Source: Zacks Investment Research
Outlook
For fiscal 2022, the United States Department of Agriculture (“USDA”) projects domestic protein production (beef, pork, chicken and turkey) to be relatively in-line with fiscal 2021 levels.
Starting from fiscal 2022, management launched a new productivity program to drive a better, faster and more agile organization. The company is projecting to achieve $1 billion in productivity savings by the end of fiscal 2024 and over $400 million in fiscal 2022, relative to a fiscal 2021 cost baseline. Management is on track to achieve its fiscal 2022 productivity savings. Management now anticipates sales in the $52-$54 billion in fiscal 2022. Earlier, the metric was anticipated sales in the upper end of $49-$51 billion in fiscal 2022.
Segment-Wise Guidance for Fiscal 2022
For the Beef segment, USDA projects domestic production to grow less than 1% year over year in fiscal 2022. For Pork, domestic production is projected to decline almost 3% year over year in fiscal 2022, per the USDA. USDA forecasts production in the Chicken segment to improve by nearly 1% in fiscal 2022. For fiscal 2022, the company expects lower results from its foreign operations in the International/Other segment owing to supply chain disruptions and other pandemic-induced impacts.
Shares of this Zacks Rank #4 (Sell) company have decreased 7.2% in the past three months compared with the industry’s rise 2.2% decline.
Inter Parfums develops, manufactures and distributes prestige perfumes and cosmetics. It currently carries a Zacks Rank #2 (Buy). Inter Parfums has a trailing four-quarter earnings surprise of 46.7%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for IPAR’s current financial year sales and EPS suggests growth of 12.5% and 10.9%, respectively, from the year-ago period’s figures.
McCormick is one of the leading manufacturers, marketers and distributors of spices, seasonings, specialty foods and flavors. It presently carries a Zacks Rank #2.
The Zacks Consensus Estimate for McCormick's current financial year sales and EPS suggests growth of 5% and 3.9%, respectively, from the year-ago period’s reported figures. MKC has a trailing four-quarter earnings surprise of 7.3%, on average.
Sysco, the marketer and distributor of food and related products, currently carries a Zacks #2. SYY has a trailing four-quarter earnings surprise of 3.7%, on average.
The Zacks Consensus Estimate for Sysco’s current financial year sales and earnings suggests growth of 28.9% and 111.1%, respectively, from the corresponding year-ago period’s reported figures.
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Tyson Foods (TSN) Q2 Earnings Top Estimates, Sales Up Y/Y
Tyson Foods, Inc. (TSN - Free Report) posted impressive second-quarter fiscal 2022 results, with the top and the bottom line increasing year over year. Sales and earnings surpassed the Zacks Consensus Estimate. Management highlighted that better operational execution and solid customer and consumer demand for its brands and products are contributing to the upside. Management raised its fiscal 2022 sales view.
Tyson Foods, Inc. Price and EPS Surprise
Tyson Foods, Inc. price-eps-surprise | Tyson Foods, Inc. Quote
Quarter in Detail
Adjusted earnings came in at $2.29 per share, beating the Zacks Consensus Estimate of $1.83. The bottom line rallied 71% year over year.
Total sales came in at $13,117 million, up 16.1% from $11,300 million reported in the year-ago quarter. The top line surpassed the Zacks Consensus Estimate of $12,432.3 million. Gains from average price change were 17.6%, while total volumes inched down 1.5%.
Gross profit in the quarter came in at $1,735 million, up from $1,253 million reported in the prior-year quarter. Gross profit, as a percentage of sales, came in at 13.2%, up from 11.1% reported in the year-ago quarter. Tyson Foods’ adjusted operating income increased 57% to $1,161 million. Adjusted operating margin expanded to 8.9% from 6.5% reported in the year-ago quarter.
Segment Details
Beef: Sales in the segment increased to $5,034 million from $4,046 million reported in the year-ago quarter, on solid global demand. These were somewhat offset by a challenging labor environment and ongoing supply chain constraints. Volume inched up 0.6% and the average price increased 23.8% in the segment.
Pork: Sales in the segment increased to $1,565 million from $1,477 million reported in the year-ago quarter. Sales volume declined 4.8%, mainly owing to the adverse impacts stemming from the tough labor environment.The average price increased 10.8% owing to increase input costs like live hogs, labor, freight and transportation costs. These were somewhat offset by an unfavorable mix related to labor shortages.
Chicken: Sales in the segment increased to $4,086 million from $3,553 million reported in the year-ago quarter. Sales volume inched up 0.6%, mainly driven by a solid demand environment somewhat offset by supply chain constraints. The average price increased 14.4% on the impacts of pricing actions undertaken amid the inflationary cost environment.
Prepared Foods: Sales in the segment rose to $2,393 million from $2,164 million reported in the year-ago quarter. Prepared Foods’ sales volume declined 5.3%, thanks to reduced production throughput stemming from tough labor and supply environment as well as uneven foodservice recovery. Divestiture of its pet treats business (concluded in fourth-quarter fiscal 2021) also hurt the metric. The average price increased 15.9%, mainly owing to the effects of revenue management through an inflationary cost environment and a positive product mix.
International/Other: Sales in the segment were $565 million, up from $487 million reported in the year-ago quarter. Volume moved up 5.1%, while average sales price jumped 10.9%.
Other Financial Updates
The company exited the quarter with cash and cash equivalents of $1,151 million, long-term debt of $8,270 million and total shareholders’ equity (including non-controlling interests) of $19,156 million. In six months ended Apr 2, 2022, cash provided by operating activities amounted to $1,224 million.
Liquidity was $3.4 billion as of Apr 2, 2022. Management expects liquidity to remain above the company’s minimum target of $1 billion. The company projects capital expenditures to be nearly $2 billion for fiscal 2022.
Image Source: Zacks Investment Research
Outlook
For fiscal 2022, the United States Department of Agriculture (“USDA”) projects domestic protein production (beef, pork, chicken and turkey) to be relatively in-line with fiscal 2021 levels.
Starting from fiscal 2022, management launched a new productivity program to drive a better, faster and more agile organization. The company is projecting to achieve $1 billion in productivity savings by the end of fiscal 2024 and over $400 million in fiscal 2022, relative to a fiscal 2021 cost baseline. Management is on track to achieve its fiscal 2022 productivity savings. Management now anticipates sales in the $52-$54 billion in fiscal 2022. Earlier, the metric was anticipated sales in the upper end of $49-$51 billion in fiscal 2022.
Segment-Wise Guidance for Fiscal 2022
For the Beef segment, USDA projects domestic production to grow less than 1% year over year in fiscal 2022. For Pork, domestic production is projected to decline almost 3% year over year in fiscal 2022, per the USDA. USDA forecasts production in the Chicken segment to improve by nearly 1% in fiscal 2022. For fiscal 2022, the company expects lower results from its foreign operations in the International/Other segment owing to supply chain disruptions and other pandemic-induced impacts.
Shares of this Zacks Rank #4 (Sell) company have decreased 7.2% in the past three months compared with the industry’s rise 2.2% decline.
3 Hot Staple Bets
Some better-ranked stocks are Inter Parfums, Inc. (IPAR - Free Report) , McCormick & Company (MKC - Free Report) and Sysco Corporation (SYY - Free Report) .
Inter Parfums develops, manufactures and distributes prestige perfumes and cosmetics. It currently carries a Zacks Rank #2 (Buy). Inter Parfums has a trailing four-quarter earnings surprise of 46.7%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for IPAR’s current financial year sales and EPS suggests growth of 12.5% and 10.9%, respectively, from the year-ago period’s figures.
McCormick is one of the leading manufacturers, marketers and distributors of spices, seasonings, specialty foods and flavors. It presently carries a Zacks Rank #2.
The Zacks Consensus Estimate for McCormick's current financial year sales and EPS suggests growth of 5% and 3.9%, respectively, from the year-ago period’s reported figures. MKC has a trailing four-quarter earnings surprise of 7.3%, on average.
Sysco, the marketer and distributor of food and related products, currently carries a Zacks #2. SYY has a trailing four-quarter earnings surprise of 3.7%, on average.
The Zacks Consensus Estimate for Sysco’s current financial year sales and earnings suggests growth of 28.9% and 111.1%, respectively, from the corresponding year-ago period’s reported figures.