SPRIGNDALE, ARK. — Tyson Foods Inc.’s Chicken segment helped the company achieve its best quarterly performance in more than two years, and a third-consecutive quarter with year-over-year increases in sales, adjusted operating income, and adjusted earnings per share, according to the company’s first-quarter results ended Dec. 28, 2024.

Tyson reported $13.6 billion in first-quarter sales, up 2.3% compared to the same period last year. Adjusted operating income was $659 million, an increase of 60% year-over-year, and adjusted earnings per share rose to $1.14, up 65% compared to last year. Net income was $359 million, equal to $1.03 per share on the common stock, versus $107 million, equal to 31¢ per share, the year prior. 

“Our results this quarter were driven by another robust performance in Chicken, highlighted by the best first quarter adjusted operating income for the segment,” said Donnie King, Tyson’s president and chief executive officer. “While we have managed through ongoing challenges posed by the current cattle cycle, protein remains at the forefront of consumer preferences.”

In addition to higher sales due to protein demand, King said the Chicken segment also benefited from lower first-quarter feed costs. The company overall has streamlined its operations over the past year to reduce costs, including closing three plants last December, and also has seen volume growth in its foodservice channel. 

Based on the positive first-quarter results, Tyson is raising its sales guidance for 2025 to between flat to up 1%. Total adjusted operating income has been raised to between $1.9 billion to $2.3 billion, and the company’s full-year cash flow expectations are now in the range of $1 billion to $1.6 billion. 

Curt Calaway, Tyson’s chief financial officer, remarked that the first quarter adjusted operating income and adjusted earnings per share reached their highest levels in Tyson’s past nine quarters, “underscoring our team’s ability to execute with discipline and deliver results in a dynamic environment.”

Segment performance

First-quarter chicken sales rose to $4.065 billion, up from $4.033 billion year-over-year, with an adjusted operating income of $368 million compared to $192 million the year prior. Due to the strong results, Tyson raised its 2025 adjusted operating income guidance for Chicken to $1 billion to $1.3 billion. “Chicken had the best first quarter adjusted operating income performance ever and the strongest quarter in eight years,” King said. 

Tyson’s Beef segment had $5.335 billion in first-quarter sales, up from $5.023 billion year over year. However, operating expenses and an ongoing beef shortage saw Tyson’s Beef segment lose $32 million in the first quarter, which is an improvement over $117 million in losses the year prior. The company’s Beef segment guidance for 2025 remains unchanged with an expected loss of $400 million to $200 million.

“It’s important to understand that the beef business has cyclicality in it,” said Brady Stewart, Tyson’s group president for beef and pork, and chief supply chain officer. “At the top side of these cycles, we see a curve and at the bottom end of these cycles, we see a curve as well. And it really feels like we are at the absolute bottom of the cycle here relative to that curve.” Stewart added that cattle harvest numbers are down nearly 19% year-over-year.

Pork sales increased slightly from $1.5 billion to $1.6 billion year-over-year, with an adjusted operating income of $59 million, compared to $68 million a year ago. Prepared Foods sales were $2.47 billion, down from $2.54 billion the year prior, while adjusted operating income was $234 million, compared to $264 million in 2024. Tyson said the 2025 sales outlook for both Pork and Prepared Foods remained unchanged and are in-line with company expectations.

“We continue to be pleased with the performance of our Jimmy Dean bacon and Hillshire snacking items that remain two of the fastest-growing brands in their categories,” said Kyle Narron, Tyson’s group president, prepared foods. “We had another great season with consumers on our Jimmy Dean roll sausage, where we continue to realize share growth as the category leader.” Innovation-wise, Narron noted that Jimmy Dean griddle cakes “have surpassed $100 million in the last 52 weeks, which is a first for any launch we’ve had in the last six years. And our chicken biscuit has growing distribution and higher repeat purchase rates than griddle cakes did six months through its launch.” 

Tariff strategy

During the call, several analysts asked Tyson what its plans were to navigate retaliatory tariffs implemented by Canada and Mexico, should the US execute its own tariffs on those countries. One analyst noted that approximately 10% of every hog in the US is sent to Mexico. 

“Our teams continuously engage in contingency planning to minimize business disruption from trade or supply chain changes,” King said. “As we’ve done in the past, we’ll leverage our global expertise to identify the best markets for our products amid evolving conditions. We have chicken leg quarters going into Mexico. Mexico is a large trading partner for us. So essentially, what we would do, whether it be pork or chicken is we would find other markets and leverage our global knowledge and expertise to try to move those products if necessary.” 

Photo: ©PHILIP – STOCK.ADOBE.COM

On the topic of deportations and its potential impact on Tyson’s workforce, King said, “Everyone that works at Tyson Foods is legally authorized to do so. We’re confident that we’ll be able to continue to successfully run our business. There are different statuses for immigrants. For example, we have DACA, refugees, parole and temporary protected status. And we’re in complete compliance on every one of those. There have been no immigration or ICE visits to any of our facilities.”

Wes Morris retiring

King concluded the call by announcing that Wes Morris, Tyson’s group president of poultry, would be retiring this year. “About two years ago, I asked Wes Morris to come out of retirement and get our poultry business back on track and develop a strong succession plan. At the time I asked Wes for three years, and we’re now in the final year of the three-year commitment. Over the balance of this year, Wes will be transitioning out of the company and back to his ranch with his wife Terry,” King said. “I think Wes has clearly gotten our business back on track and developed a great team, and I am forever indebted to Wes and thank him for his leadership and his friendship. In the coming weeks, I’ll announce the new president of poultry, and we will have a seamless transition over the balance of the year."