Tyson Foods raises profit forecast as beef business faces deeper losses
Beef operations continue to struggle with lower cattle supply and weaker volumes
USA – Tyson Foods has raised its adjusted operating profit guidance for fiscal 2026 after stronger performance in its chicken segment, while warning that losses in beef operations are expected to widen because of ongoing cattle shortages.
The US meat processor said its adjusted operating profit for the year is now projected at between US$2.2B and US$2.4B, up from its earlier forecast of US$2.1B to US$2.3B.
In addition, Tyson Foods increased its adjusted operating income outlook for the chicken division by US$200M, bringing the expected range to US$1.9B-US$2.05B, following solid sales in the second quarter ended 28 March.
However, the company said its beef business continued to face supply constraints, with volumes falling 13.1% during the quarter and 10.1% in the first half of the fiscal year because of lower cattle availability across the US market.
As a result, Tyson Foods now expects adjusted operating losses in beef to range between US$350M and US$500M, down from its earlier guidance of US$250M to US$ 500 M.
Chief executive officer Donnie King told analysts on 4 May that the company’s adjusted operating profit was moving toward the upper end of the forecast range, while adding that performance in the second half of the fiscal year is expected to improve after the first-half adjusted operating profit fell 9% to US$1.07B.
Input costs continue to rise
King also said Tyson Foods is facing higher costs across several categories linked to developments in the Middle East, including increases in freight and diesel expenses compared with the prior year.
He added that commodity costs tied to pork, beef and turkey used in prepared foods have also increased, with prepared foods commodity expenses rising by US$50M during the second quarter and by US$150M year to date.
According to King, the company is continuing to adjust pricing to offset the higher raw material costs affecting the prepared foods business.
Meanwhile, Tyson Foods said it has reduced capacity within its beef operations by shutting down its Lexington facility in Nebraska and scaling back production at its Amarillo plant in Texas to align with the lower cattle supply.
Chief operating officer Devin Cole said the revised production footprint is helping improve capacity utilisation while positioning the business to operate more efficiently under current market conditions.
Even so, Tyson Foods maintained its expectation that total sales across all protein segments will grow between 2% and 4% during fiscal 2026.
The company also left unchanged its adjusted operating income outlook for pork at between US$250M and US$300M, prepared foods at between US$1.25B and US$1.35B, and international operations at between US$150M and US$200M.
Separately, Tyson Foods said it is using artificial intelligence tools to track consumer trends, improve pricing strategies and accelerate product development as year-to-date sales increased 4.8% to US$27.97B.
However, earnings per share declined 11% to US$1.84.
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