Tyson Foods plans further price hikes to offset inflation pressures
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Tyson Foods Inc. is planning further price increases to offset soaring costs.
The Springdale, Arkansas-based Tyson, the biggest U.S. meat company by sales, said chicken prices rose 19% during its fiscal fourth quarter while beef and pork prices jumped 33% and 38%, respectively.
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"We expect to take continued pricing actions to ensure that any inflationary cost increases that our business incurs are passed along," said Tyson Foods CFO Stewart Glendinning on the company’s quarterly earnings call. "Our pricing has lagged inflation, but we expect to recover those cost increases during fiscal '22."
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Tyson Foods achieved a 13% price improvement during fiscal year 2021, and a 24% increase during the fourth quarter. The price increases helped sales grow by 20% in the most recent quarter despite a 4% drop in volume that was primarily due to labor challenges.
Management is planning pricing initiatives for its prepared food business and in its beef and pork segments. Chicken prices reflect the current pricing environment.
Headwinds from higher prices are expected to persist into next year as cost initiatives for beef and pork are expected to weigh slightly on volumes.
Still, Tyson sees fiscal year 2022 revenue growing to between $49 billion and $51 billion, up from $47 billion in 2021.
In the fourth quarter, Tyson booked a profit of $1.15 billion, or an adjusted $2.30 per share, on revenue of $12.81 billion. Analysts surveyed by Refintiv were expecting adjusted earnings of $2.16 per share and revenue of $12.75 billion.
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Tyson Foods shares were up 26% this year through Friday, slightly outperforming the S&P 500’s 25% gain.
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