Tyson Foods struggles with beef losses as rising prices push consumers to cheaper meats
The meat processor has reported a lower-than-expected revenue for the quarter. Despite stronger chicken sales, Tyson maintains its full-year earnings projection.
USA – Tyson Foods reported lower quarterly sales on Monday, missing analyst estimates due to a slowdown in beef demand and sticking with its full-year revenue outlook.
The company said total net sales for the quarter came in at US$13.07 billion, short of Wall Street’s projected US$13.14 billion, according to data from LSEG.
While earnings per share reached US$0.92, beating expectations of US$0.82, the revenue miss triggered a 9% drop in the company’s stock price.
Beef, Tyson’s most profitable segment, continues to struggle as rising prices and tight supply conditions weigh on consumer demand.
The price of beef rose by 8.2% in the second quarter ending March 29, following years of drought that led U.S. ranchers to reduce their cattle herds and cut grazing capacity.
CEO Donnie King told analysts that the current beef market is facing the toughest conditions the company has encountered.
He added that global trade tensions, particularly tariff concerns linked to past U.S. trade policy, continue to raise uncertainty about pricing and exports.
Although exports represent less than 10% of Tyson’s total sales, King warned that some short-term disruptions are likely if tariffs persist.
However, he emphasized that Tyson does not expect a decline in global meat consumption, projecting that trade flows will eventually adjust.
Meanwhile, as beef prices rise, shoppers are shifting to cheaper alternatives such as chicken, reflecting the impact of inflation and cautious consumer sentiment.
Tyson’s beef unit recorded an adjusted operating loss of US$181 million over the six months through March, underlining the financial pressure the segment faces.
Strong chicken sales, steady forecast
In contrast, the company’s chicken division posted improved results, with sales volumes increasing by 3% as average prices fell 1.1%, pushing adjusted income up to US$312 million from US$160 million a year earlier.
Despite this positive performance in poultry, Tyson did not revise its guidance and continues to project adjusted operating income between US$1.9 billion and US$2.3 billion for fiscal year 2025.
Some investors had anticipated a raised forecast based on early-year gains, but the company said it remains cautious given ongoing economic pressures.
“We’re dealing with an operating loss in beef, on top of inflation and the risk of tariffs,” King explained during the call.
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