- Tyson raises annual adjusted operating income forecast
- Q2 beef sales volumes down 13.1%, while prices up 11.5%
- Q2 chicken volumes up 1.7%
May 4 (Reuters) - Meat packer Tyson Foods reported better-than-expected quarterly earnings on Monday, as rising chicken sales helped counter a sharp drop in demand for high-priced beef.
Protein-hungry consumers have shifted toward buying more affordable types of meat, such as chicken and pork, as beef prices have set records.
"Animal protein remains top of mind for consumers," CEO Donnie King said, adding that Tyson is positioned to benefit from the long-term trend of protein being part of a healthy diet.
Tyson raised its fiscal 2026 income forecast for the chicken business to $1.9 billion to $2.05 billion, from $1.65 billion to $1.9 billion projected earlier.
Chicken volumes rose 1.7% during the second quarter, while the unit's adjusted operating margin increased 12.2%.
Tyson's beef segment, however, continues to struggle after years of drought curtailed U.S. cattle supplies, driving up beef prices and squeezing processor margins as rising livestock costs outpace gains from higher selling prices.
The Ball Park hotdog maker said cattle costs rose about $600 million in the second quarter from a year earlier.
Tyson expects an adjusted operating loss of $350 million to $500 million in its beef business in fiscal 2026, compared with a loss of $250 million to $500 million forecast earlier.
The forecast implies lower losses in the back half of the year than in the first.
Its beef unit posted a quarterly adjusted operating loss of $202 million, widening from a $113 million loss a year earlier.
In November, U.S. President Donald Trump accused meat-packing companies of driving up beef prices through manipulation and collusion and ordered the Department of Justice to investigate.
Company-wide, adjusted earnings of 87 cents per share beat analysts' average estimate of 78 cents, according to data compiled by LSEG.
It said the Middle East conflict could have material impacts, including higher transportation costs, but noted no material effects so far.
Tyson raised its annual adjusted operating income forecast to $2.2 billion to $2.4 billion, from $2.1 billion to $2.3 billion earlier.
Reporting by Tom Polansek in Chicago and Neil J Kanatt in Bengaluru; Editing by Shilpi Majumdar
Source: Reuters