Tyson Foods reported quarterly sales that fell short of expectations, while it maintained its annual revenue forecast. On Monday, the company noted a drop in beef demand, which contributed to a 9% decline in stock prices, despite better-than-anticipated earnings.
Concerns surrounding President Trump’s trade policies are affecting meat companies, particularly about how tariff disputes might raise consumer goods prices and further diminish the demand for pricier meat options.
Ranchers are already feeling the impact, as many have reduced their herds due to droughts that have negatively affected grazing pastures.
“Beef is experiencing the most challenging market situation we’ve ever seen,” said CEO Donnie King during a call with analysts.
Tyson also cautioned that tariffs might disrupt sales, although it noted that exports represent less than 10% of its business. King expressed confidence that the effects would be short-lived as trade dynamics shift, and he doesn’t predict a decline in global meat consumption.
During the second quarter, Tyson’s beef demand dropped even as average prices increased by 8.2%. This period ended on March 29. Many consumers are opting for cheaper meats like chicken, especially as overall sentiment among shoppers declines.
Tyson’s primary segment, the Beef Business, incurred an adjusted operating loss of $181 million for the six months concluding in March.
The company is holding steady on its total operating profit estimate, which ranges between $1.9 billion and $2.3 billion for 2025.
While some investors anticipated that Tyson’s chicken sales would bolster overall performance, King seemed content with the existing forecast, commenting, “We’ve lost $181 million, and now we face tariffs, consumer pressure, and inflation.”
According to LSEG data, Tyson’s quarterly net sales hit $13.07 billion, slightly below analyst expectations of $13.14 billion. However, earnings of 92 cents per share surpassed the anticipated 82 cents.
Tyson’s chicken segment experienced a slight average price decline of 1.1%, which led to a 3% rise in quarterly sales, boosting revenue to $312 million compared to $160 million the previous year.
Bernstein analyst Alexia Howard remarked over the phone, “You had a strong first half of the year, but maintaining the same guidance suggests a significant drop in operating profit over the year.”
Tyson’s sales are under pressure from a legal issue, with the company noting an increase in acquisition expenses by $250 million due to a claim related to price-fixing in its pork division.
