Prepared Foods Help Tyson Sales


Tyson Foods announced recently that its prepared foods segment has significantly contributed to sales growth in the first nine months of its fiscal year.

“We continued to grow our business in Q3, even with the headwinds we faced related to oversupply and pricing,” said Tom Hayes, Tyson Foods president and chief executive officer. “In this challenging environment, we delivered a solid quarter overall, growing earnings, operating income and margins. Our diverse portfolio continues to be a key advantage for us. Our Beef and Prepared Foods segments had a strong quarter, helping to balance the results in our Chicken and Pork segments, which faced stiff headwinds,” he added.

Sales volume increased for the nine months and third quarter of fiscal 2018 primarily from incremental volume from business acquisitions. Average sales price increased for the nine months and third quarter from higher input costs of USD80 million for the nine months of fiscal 2018 and product mix which was positively impacted by business acquisitions. Operating income increased for the nine months and third quarter of fiscal 2018 due to USD101 million and USD39 million, respectively, of Financial Fitness Program cost savings, in addition to positive impacts from improved mix and incremental business acquisition results, partially offset by higher input and freight costs and one-time cash bonus to frontline employees of USD19 million incurred in the second quarter of fiscal 2018. Additionally, operating income was impacted in the nine months of fiscal 2018 by a USD79 million impairment, net of realized gain, related to the divestiture of non-protein businesses, and was impacted in the nine months of 2017 from USD21 million of AdvancePierre purchase accounting and acquisition related costs and a USD52 million impairment of our San Diego Prepared Foods operation.

“AdvancePierre contributed USD872 million of incremental revenue in the first nine months of fiscal 2018, or incremental USD1.3 billion in the first full year as part of our operation. We expect to capture Financial Fitness Program net savings of approximately of USD140 million in fiscal 2018, which is a combination of AdvancePierre net synergies and reduction of non-value added costs. We currently expect raw material costs to be flat in fiscal 2018 as compared to fiscal 2017. For fiscal 2018, we expect our Prepared Foods segment’s adjusted operating margin to exceed 11%, with similar results in fiscal 2019,” Tyson Foods said in a statement.

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