- Tyson Foods shares sank to their lowest price in more than three years on Monday.
- The sell-off was sparked after the meatpacker unexpectedly swung to a second-quarter loss.
- Beef sales and volume fell in the quarter during a “challenging” period for meat sales.
Tyson Foods shares on Monday tumbled to a three-year low as a drop in beef sales contributed to pushing the company to a quarterly loss and lowering its outlook for revenue.
Consumers grappling with still-elevated inflation while drought continues to hurt the cattle market put pressure on the meatpacker’s second-quarter results. Investors dragged the stock down by 16% to $51.23, the weakest price since March 2020 when shares exchanged hands below $43 each.
Tyson Foods, whose brands include Hillshire Farm, Jimmy Dean and Ball Park, slashed its fiscal 2023 sales forecast to a range of $53 billion to $54 billion. It previously projected sales of $55 billion to $57 billion.
“While the current protein market is challenging, we have a strong growth strategy in place and are bullish on our long-term outlook,” Donnie King, the CEO of Tyson Foods, said in the earnings report.
The company last month said it would cut 10% of corporate positions to reduce costs.
Tyson said in the second quarter, average sale prices for beef declined by 5.4% during the three months ended April 1. Beef sales overall slumped by 8.3% to $4.62 billion as volume pulled back by 2.9%.
Tyson said it sees a decrease in margins for its beef segment for fiscal 2023. It forecast adjusted operating margin coming in between a fall of 1% to an increase of 1%. Pork prices dropped by 10.4% in the second quarter while chicken prices increased by 2% during the period.
The company, which produces about 20% of beef, pork and chicken in the US, swung to a per-share loss of $0.28, missing the $0.80 a share gain estimated by FactSet.
Tyson posted a loss of $97 million after logging $829 million in net income a year ago.
Read the original article on Business Insider
