Tyson Foods Reports Fourth Quarter and Fiscal 2023 Results
Tyson Foods Sees Another Quarter of Sequential Adjusted Operating Income Growth with Continued Focus on Operational Excellence
SPRINGDALE, Ark., Nov. 13, 2023– Tyson Foods, Inc. (NYSE: TSN), one of the world’s largest food companies and a recognized leader in protein with leading brands including Tyson, Jimmy Dean, Hillshire Farm, Ball Park, Wright, Aidells, ibp and State Fair, reported the following results:
(in millions,
except per share
data) Fourth Quarter Twelve Months Ended
-----------------------
2023 2022 2023 2022
-------- ------- --------
Sales $13,348 $13,737 $ 52,881 $ 53,282
Operating Income
(Loss) $ (463) $ 766 $ (395) $ 4,410
Adjusted(1)
Operating Income
(non-GAAP) $ 236 $ 823 $ 933 $ 4,414
Net Income (Loss)
Per Share
Attributable to
Tyson $ (1.31) $ 1.50 $ (1.87) $ 8.92
Adjusted(1) Net
Income Per Share
Attributable to
Tyson (non-GAAP) $ 0.37 $ 1.63 $ 1.34 $ 8.73
(1) The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). As used in this table and throughout this earnings release, adjusted operating income (loss) and adjusted net income (loss) per share attributable to Tyson (Adjusted EPS) are non-GAAP financial measures. Refer to the end of this release for an explanation and reconciliation of these and other non-GAAP financial measures used in this release to comparable GAAP measures.
Fourth Quarter Highlights
-- Sales of $13,348 million, down 2.8% from prior year -- GAAP operating loss of ($463) million, down 160% from prior year -- Adjusted operating income of $236 million, down 71% from prior year -- GAAP EPS of ($1.31), down 187% from prior year -- Adjusted EPS of $0.37, down 77% from prior year -- Total Company GAAP operating margin of (3.5%) -- Total Company adjusted operating margin (non-GAAP) of 1.8% -- Liquidity of approximately $3.0 billion as of September 30, 2023 -- Recorded a goodwill impairment charge of $333 million in our Beef segment
Fiscal 2023 Highlights
-- Sales of $52,881 million, down 0.8% from prior year
-- GAAP operating loss of ($395) million, down 109% from prior year
-- Adjusted operating income of $933 million, down 79% from prior year
-- GAAP EPS of ($1.87), down 121% from prior year
-- Adjusted EPS of $1.34, down 85% from prior year
-- Total Company GAAP operating margin of (0.7%)
-- Total Company adjusted operating margin (non-GAAP) of 1.8%
-- Announced the closure of six Chicken facilities expected to reduce costs
and improve capacity utilization
“While economic headwinds persist, we are moving in the right direction and managing what we can control,” said Donnie King, President & CEO, Tyson Foods. “The decisions we have taken have made us more operationally efficient and aided a second quarter of sequential improvement in adjusted operating income. The strategy and leadership team we have in place will allow us to take advantage of the long-term opportunities in front of us and drive shareholder value.”
SEGMENT RESULTS (in millions)
Sales
(for the fourth quarter and twelve months ended September
30, 2023, and October 1, 2022)
----------------------------------------------------------------------------------------------------------
Fourth Quarter Twelve Months Ended
----------------------------------------- -----------------------------------------
Volume Avg. Price Volume Avg. Price
2023 2022 Change Change(2) 2023 2022 Change Change(2)
------ ------ -------- ----------- ------ ------ -------- -----------
Beef $ 5,029 $ 4,859 (6.7)% 10.2% $19,325 $19,854 (3.1)% 0.4%
Pork 1,494 1,604 (0.2)% (6.7)% 5,768 6,414 (2.2)% (7.9)%
Chicken 4,155 4,619 1.7% (9.2)% 17,060 16,961 3.4% (1.9)%
Prepared Foods 2,502 2,516 1.0% (1.6)% 9,845 9,689 0.3% 1.3%
International/Other 636 638 4.9% (5.2)% 2,515 2,355 4.9% 1.9%
Intersegment Sales (468) (499) n/a n/a (1,632) (1,991) n/a n/a
------ ------ ---- ----- ---- ------ ------ ---- ----- ----
Total $13,348 $13,737 (0.6)% (1.4)% $52,881 $53,282 1.0% (1.5)%
------ ------ ---- ----- ------ ------ ---- -----
Operating Income (Loss)
(for the fourth quarter and twelve months ended September
30, 2023, and October 1, 2022)
Fourth Quarter Twelve Months Ended
----------------------------------- -----------------------------------
Operating Margin Operating Margin
2023 2022 2023 2022 2023 2022 2023 2022
---- ---- --------- -------- ---- ----- --------- --------
Beef $(323) $ 375 (6.4)% 7.7% $ (91) $2,502 (0.5)% 12.6%
Pork (11) (55) (0.7)% (3.4)% (139) 193 (2.4)% 3.0%
Chicken (267) 340 (6.4)% 7.4% (770) 955 (4.5)% 5.6%
Prepared Foods 118 111 4.7% 4.4% 823 746 8.4% 7.7%
International/Other 20 (5) n/a n/a (218) 14 n/a n/a
---- ---- ---- --- ---- ---- ----- ---- --- ----
Total $(463) $ 766 (3.5)% 5.6% $(395) $4,410 (0.7)% 8.3%
---- ---- ---- ---- ---- ----- ---- ----
ADJUSTED SEGMENT RESULTS (in millions)
Adjusted Operating Income (Loss) (Non-GAAP)(1)
(for the fourth quarter and twelve months ended September
30, 2023, and October 1, 2022)
Fourth Quarter Twelve Months Ended
----------------------------------------- -----------------------------------------
Adjusted Operating Margin Adjusted Operating Margin
(Non-GAAP) (Non-GAAP)
2023 2022 2023(2) 2022 2023 2022 2023(2) 2022
---- ---- ------------ ----------- ---- ------ ------------ -----------
Beef $ 17 $ 391 0.3% 8.0% $ 233 $2,491 1.2% 12.5%
Pork (8) (50) (0.5)% (3.1)% (128) 198 (2.2)% 3.1%
Chicken 75 337 1.8% 7.3% (77) 926 (0.4)% 5.5%
Prepared Foods 151 147 6.0% 5.8% 889 782 9.0% 8.1%
International/Other 1 (2) n/a n/a 16 17 n/a n/a
---- ---- ---- ------ ---- ----- ---- ----- ---- ------ ---- -----
Total $ 236 $ 823 1.8% 6.0% $ 933 $4,414 1.8% 8.3%
---- ---- ---- ----- ---- ---- ---- ----- ---- ----- ---- ----
(2) Average Price Change and Adjusted Operating Margin for the Chicken segment and Total Company exclude $118 million and $156 million for the three and twelve months ended September 30, 2023, respectively, of legal contingency accruals recognized as a reduction to Sales.
OUTLOOK
For fiscal 2024, the United States Department of Agriculture (USDA) indicates domestic protein production (beef, pork, chicken and turkey) should decrease slightly compared to fiscal 2023 levels. The following is a summary of the updated outlook for each of our segments, as well as an outlook for revenues, capital expenditures, net interest expense, liquidity, tax rate and dividends for fiscal 2024. Certain of the outlook numbers include adjusted operating margin (a non-GAAP metric) for each segment. The Company is not able to reconcile its full-year fiscal 2024 projected adjusted results to its fiscal 2024 projected GAAP results because certain information necessary to calculate such measures on a GAAP basis is unavailable or dependent on the timing of future events outside of our control. Therefore, because of the uncertainty and variability of the nature of and the amount of any potential applicable future adjustments, which could be significant, the Company is unable to provide a reconciliation for these forward-looking non-GAAP measures without unreasonable effort. Adjusted operating margin should not be considered a substitute for operating margin or any other measures of financial performance reported in accordance with GAAP. Investors should rely primarily on the Company’s GAAP results and use non-GAAP financial measures only supplementally in making investment decisions.