Tyson Foods rose in price on the background of the rise in the cost of meat
In its quarterly report, meat supplier Tyson Foods Inc. (TSN) showed an increase in sales and profits amid an increase in prices for primary products in the United States. They have caused TSN shares to rise by 12.23% to $99.09.
In the past first quarter of the fiscal year 2022, which ended on January 1, Tyson Foods’ sales increased by 24% year-on-year to $12.9 billion. Adjusted operating profit increased 40% to $1.4 billion, and adjusted earnings per share increased 48% to $2.87. The main driver is the increase in prices for Tyson Foods’ main products: beef, chicken, and pork increased by 31.7%, 19.9%, and 12.8%, respectively.
Raise prices to compensate for increased labor costs and solve supply problems. As a result, Tyson Foods manages to successfully operate in the current conditions and balance the product portfolio, preventing a significant drop in sales in specific segments. By the end of the 2022 fiscal year, Tyson Foods expects sales of $51 billion, which means an increase of 8% year on year.
At the same time, the company intends to reduce costs and achieve savings of $ 1 billion by the end of 2024. In 2022, it to reduce costs by $ 400 million. An additional growth factor for Tyson Foods is the recovery of economic activity and the return of restaurants to regular operation, which Ffin.ru noted earlier. However, the risk for Tyson Foods remains the possible attention of regulators due to price increases.
Stimulate competition in the industry to prevent excessive price increases and monopolization. However, for Tyson Foods, the competition is not as scary as for smaller players since the company is a partner of large Yum catering chains! Brands, McDonald’s, Burger King, Wal-Mart, Kroger, etc.
