Tyson Foods 2023: Sales Decline and Plant Closures Drive Stock Down, Cost-Cutting Measures Underway
Tyson Foods faces a sales downturn in 2023, missing earnings expectations and announcing multiple plant closures to reduce expenses amid challenging market conditions.
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Highlights
- Tyson Foods falls short of earnings and revenue predictions, initiating additional plant shutdowns to lower costs.
- Significant declines in sales and operating margins for chicken and pork segments reported.
- Plans to close four more chicken processing plants in early fiscal 2024, following two closures in May.
Shares of Tyson Foods Inc. (TSN) dropped more than 5% in early trading Monday after the company revealed disappointing third-quarter fiscal 2023 results and announced further plant closures aimed at cost reduction as sales weaken.
The company reported an EPS of 15 cents, falling short of analyst expectations, while revenue declined 2.6% to $13.14 billion, missing forecasts.
Sales decreased by 16.4% in pork, 5.5% in chicken, and 1.9% in prepared foods, though beef sales increased by 5.2%. Operating margins suffered a 7.5% drop for chicken and 5.6% for pork, while beef and prepared foods margins improved by 1.3% and 8.6%, respectively.
Tyson announced it will close chicken processing plants located in North Little Rock, Arkansas; Corydon, Indiana; Dexter, Missouri; and Noel, Missouri, with production shifting to other facilities during the first half of fiscal 2024. This follows the May closure of two chicken plants in Arkansas and Virginia, which resulted in 1,700 job cuts.
CEO Donnie King acknowledged the ongoing market challenges, stating that these closures reflect Tyson's dedication to decisive action and operational efficiency, aiming to reduce costs and optimize capacity utilization.
Throughout 2023, Tyson Foods' stock has largely remained under pressure.
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