How did Tyson Foods perform in the first quarter of fiscal 2024?

Sales were $13,319 million, roughly flat versus $13,260 million a year earlier. GAAP operating income declined to $231 million from $467 million, and adjusted operating income declined to $411 million from $453 million. GAAP diluted EPS was $0.30 compared with $0.88, and adjusted EPS was $0.69 compared with $0.85.

What drove the decline in Beef results?

Beef recorded a GAAP operating loss of $206 million versus operating income of $166 million a year earlier. The reconciliation shows $40 million of plant closure costs, $45 million of legal contingency accruals and $4 million of restructuring charges in Beef, which bring the adjusted loss to $117 million. Beef sales were $5,023 million, with volume down 4.1% and average price up 10.5%.

What non-recurring items affected the quarter's GAAP results?

The GAAP-to-adjusted reconciliation lists plant closures of $75 million, legal contingency accruals of $73 million, restructuring and related charges of $30 million, and net production facilities fire costs of $2 million. These items reduced GAAP operating income and are excluded from adjusted figures. The company notes that its adjusted measures are non-GAAP and should be used only supplementally to GAAP results.

How is Tyson's balance sheet and liquidity position?

Liquidity was approximately $3.7 billion as of December 30, 2023, and management expects it to remain above a minimum liquidity target of $1.0 billion. Cash and cash equivalents increased to $1,484 million from $573 million at September 30, 2023, while total gross debt was $9,506 million at that earlier date per the EBITDA reconciliation. Current debt fell to $1,308 million from $1,895 million, and long-term debt rose to $8,370 million from $7,611 million.

TSN 8-K: Earnings & Results

Q: What is Tyson's full-year fiscal 2024 outlook?

Tyson expects total company adjusted operating income of $1.0 billion to $1.5 billion, with Beef at ($400) million to breakeven, Pork at breakeven to $100 million, Chicken at $500 million to $700 million and Prepared Foods at $800 million to $1 billion. Sales are expected to be relatively flat, capital expenditures $1.0 billion to $1.5 billion, net interest expense approximately $400 million, and the adjusted effective tax rate 23% to 24%.

01—Abstract

Summary

Summary of the 8-K filed February 5, 2024. Cited figures are marked; the original filing is the authoritative source.

Tyson Foods, Inc. (NYSE: TSN) filed this Form 8-K on February 5, 2024 to furnish its press release announcing results for its first quarter ended December 30, 2023.

Sales were $13,319 million^a versus $13,260 million in the prior-year quarter. GAAP operating income fell to $231 million from $467 million, and adjusted operating income (non-GAAP) was $411 million versus $453 million. GAAP net income per diluted share attributable to Tyson was $0.30 versus $0.88, and adjusted EPS (non-GAAP) was $0.69 versus $0.85.

Management highlighted a third consecutive quarter of sequential adjusted operating income growth, and reported liquidity of approximately $3.7 billion^b as of December 30, 2023. By segment, Beef swung to a GAAP operating loss of $206 million from operating income of $166 million a year earlier, while Chicken improved to $177 million from $69 million and Pork improved to $39 million from a $21 million loss. Prepared Foods operating income was $243 million versus $258 million.

The company's GAAP results include charges for plant closures ($75 million^c), legal contingency accruals ($73 million) and restructuring and related charges ($30 million) in the quarter, which are excluded from the adjusted figures. For fiscal 2024, Tyson guided to total company adjusted operating income of $1.0 billion to $1.5 billion, with Beef expected at ($400) million to breakeven, Chicken at $500 million to $700 million, and Prepared Foods at $800 million to $1 billion.

The company expects relatively flat sales, capital expenditures of $1.0 billion to $1.5 billion^d, net interest expense of approximately $400 million, and an adjusted effective tax rate of 23% to 24%. Investors are reminded that the company's own guidance states they should rely primarily on GAAP results and use non-GAAP measures only supplementally.

02—Key points

Key Highlights

Sales of $13,319 million, up 0.4% from $13,260 million in the prior-year first quarter.
GAAP operating income of $231 million, down 51% from $467 million; adjusted operating income of $411 million, down 9%.
GAAP diluted EPS of $0.30 versus $0.88; adjusted EPS of $0.69 versus $0.85 (down 19%).
Beef reported a GAAP operating loss of $206 million (adjusted loss of $117 million), compared with operating income of $166 million a year earlier.
Chicken operating income rose to $177 million from $69 million, and Pork improved to $39 million from a $21 million loss.
Liquidity of approximately $3.7 billion as of December 30, 2023, with cash and cash equivalents rising to $1,484 million from $573 million at September 30, 2023.
Fiscal 2024 outlook calls for total company adjusted operating income of $1.0 billion to $1.5 billion and capital expenditures of $1.0 billion to $1.5 billion.

03—Questions

Frequently Asked Questions

How did Tyson Foods perform in the first quarter of fiscal 2024?
Sales were $13,319 million, roughly flat versus $13,260 million a year earlier. GAAP operating income declined to $231 million from $467 million, and adjusted operating income declined to $411 million from $453 million. GAAP diluted EPS was $0.30 compared with $0.88, and adjusted EPS was $0.69 compared with $0.85.
What drove the decline in Beef results?
Beef recorded a GAAP operating loss of $206 million versus operating income of $166 million a year earlier. The reconciliation shows $40 million of plant closure costs, $45 million of legal contingency accruals and $4 million of restructuring charges in Beef, which bring the adjusted loss to $117 million. Beef sales were $5,023 million, with volume down 4.1% and average price up 10.5%.
What is Tyson's full-year fiscal 2024 outlook?
Tyson expects total company adjusted operating income of $1.0 billion to $1.5 billion, with Beef at ($400) million to breakeven, Pork at breakeven to $100 million, Chicken at $500 million to $700 million and Prepared Foods at $800 million to $1 billion. Sales are expected to be relatively flat, capital expenditures $1.0 billion to $1.5 billion, net interest expense approximately $400 million, and the adjusted effective tax rate 23% to 24%.
What non-recurring items affected the quarter's GAAP results?
The GAAP-to-adjusted reconciliation lists plant closures of $75 million, legal contingency accruals of $73 million, restructuring and related charges of $30 million, and net production facilities fire costs of $2 million. These items reduced GAAP operating income and are excluded from adjusted figures. The company notes that its adjusted measures are non-GAAP and should be used only supplementally to GAAP results.
How is Tyson's balance sheet and liquidity position?
Liquidity was approximately $3.7 billion as of December 30, 2023, and management expects it to remain above a minimum liquidity target of $1.0 billion. Cash and cash equivalents increased to $1,484 million from $573 million at September 30, 2023, while total gross debt was $9,506 million at that earlier date per the EBITDA reconciliation. Current debt fell to $1,308 million from $1,895 million, and long-term debt rose to $8,370 million from $7,611 million.

04—Continue

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