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Tyson (TSN) Down 5% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Tyson Foods (TSN - Free Report) . Shares have lost about 5% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Tyson due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Tyson Foods Q1 Earnings Lag Estimates, Sales Increase

Tyson Foods posted first-quarter fiscal 2023 results, with the bottom line falling short of the Zacks Consensus Estimate and declining year over year. Nevertheless, the top line increased and beat the consensus mark.

Quarter in Detail

Adjusted earnings came in at 85 cents per share, falling short of the Zacks Consensus Estimate of $1.35. The bottom line declined 70% year over year.

Total sales came in at $13,260 million, up 2.5% from the $12,933 million reported in the year-ago quarter. The top line surpassed the Zacks Consensus Estimate of $13,113.6 million. Gains from the average price change were 1.7%, while total volumes rose 0.8%.

The gross profit in the quarter came in at $968 million, down from the $2,015 million reported in the prior-year quarter. The gross profit, as a percentage of sales, came in at 7.3%, down from the 15.6% reported in the year-ago quarter.

Tyson Foods’ adjusted operating income plunged 68% to $453 million. The adjusted operating margin contracted to 3.4% from 11.1% reported in the year-ago quarter.

Segment Details

Beef: Sales in the segment declined to $4,723 million from the $5,002 million reported in the year-ago quarter. Volumes inched up 2.9% while the average price fell 8.5% in the segment.

Pork: Sales in the segment declined to $1,529 million from the $1,626 million reported in the year-ago quarter. Sales volumes declined 7.4% while average price gained 1.4%.

Chicken: Sales in the segment increased to $4,263 million from the $3,890 million reported in the year-ago quarter. Sales volumes climbed 2.5% and the average price increased 7.1%.

Prepared Foods: Sales in the segment rose to $2,538 million from the $2,333 million reported in the year-ago quarter. Prepared Foods’ sales volumes rose 1.2% and the average price increased 7.6%.

International/Other: Sales in the segment were $612 million, up from the $550 million reported in the year-ago quarter. Volumes moved up 6.4%, while the average sales price jumped 4.9%.

Other Financial Updates

The company exited the quarter with cash and cash equivalents of $654 million, long-term debt of $7,859 million and total shareholders’ equity (including non-controlling interests) of $19,787 million. For the three months ended Dec 31, 2022, cash provided by operating activities amounted to $762 million.

In the first quarter of fiscal 2023, the company repurchased 4.9 million shares for $313 million.

Liquidity was $2.9 billion as of Dec 31, 2022. Management expects liquidity to remain more than the company’s minimum target of $1 billion.

The company projects capital expenditures of nearly $2.5 billion for fiscal 2023. These include expenditures related to capacity expansion and utilization, automation to battle labor-related hurdles, and product and brand innovation.


For fiscal 2023, the USDA projects domestic protein production (beef, pork, chicken and turkey) to be relatively flat from the fiscal 2022 levels.

Starting from fiscal 2022, management launched a new productivity program to drive a better, faster and more agile organization. The company generated productivity savings of more than $700 million in fiscal 2022, which helped fight inflationary hurdles. The program is expected to generate savings of more than $1 billion by fiscal 2023, one year ahead of the original plan.

Management still anticipates sales in the $55-$57 billion range in fiscal 2023. The net interest expense is expected to be $330 million.

Segment-Wise Guidance for Fiscal 2023

For the Beef segment, USDA projects domestic production to fall roughly 5% year over year. For Pork, domestic production is projected to remain nearly flat. Per USDA forecasts, production in the Chicken segment will likely improve by nearly 3% in fiscal 2023. For the fiscal, the company expects better results from its foreign operations in the International/Other segment.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

The consensus estimate has shifted -46.45% due to these changes.

VGM Scores

At this time, Tyson has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.


Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Tyson has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.

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