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Foodservice Unit Aids Tyson Foods (TSN), Soft Pork Sales Ail
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Tyson Foods Inc. (TSN - Free Report) , which boasts a portfolio of impressive brands, is benefiting from its growing foodservice business. Management is undertaking several operational and supply chain efficiency programs to improve itself in the long run. However, TSN continues to battle softness in the Pork segment.
Let’s delve deeper.
Brand Strength & Foodservice Gains
Tyson Foods’ core business lines boast a portfolio of iconic retail brands, including Tyson, Jimmy Dean, Hillshire Farm and Ball Park. In the fourth quarter of fiscal 2023, such brands witnessed volume growth of 3.2% year over year, way ahead of other competitors. Management continues to see market share leadership across most retail categories in terms of pound and dollar share gains. The company intends to stay focused on merchandising and advertising to support its brands.
Speaking of the foodservice business, TSN continues to focus on six categories, including breakfast sausage, value-added chicken, dinner sausage, pepperoni pizza toppings, bacon and Philly Steak. These categories outpaced the broad-line industry in volume growth during the quarter. Management is impressed with its foodservice portfolio, which is likely to keep gaining momentum.
Image Source: Zacks Investment Research
What Else is Working in Tyson Foods’ Favor?
Tyson Foods is investing in capacity expansion and automation technology investments. In this regard, the company continues to accelerate digitalization via supply chain planning and execution processes to enhance customer service. Management is optimizing its plant network by adding fully-cooked capacity, converting plants for value-added production, executing plant flexibility and strengthening the portfolio mix. For the fiscal 2024, management projects capital expenditures to be nearly $1-$1.5 billion. These include spending related to capacity expansion, automation and product and brand innovation.
The company continues to evaluate its production footprint and network to fuel efficiencies. In this regard, management shut down six less efficient chicken plants. Tyson Foods also decided to shut down two smaller fresh meat case-ready value-added facilities.
TSN is focused on efforts to expand into the international markets as part of its strategic growth plan. Recently, management inaugurated a new fully-cooked food production facility in Danville, VA, worth $300 million. This move is in sync with Tyson Foods’ strategy to fuel sustained growth, enhance operational efficiency and invest in its poultry space.
Soft Pork Segment Hurts
Tyson Foods is facing weakness in the Pork segment stemming from supply-and-demand imbalances, which is affecting spreads. Although management is witnessing some improvement in spreads and reduced grain costs, it is still bearing the brunt of the imbalance between the supply and demand of pork. In the fourth quarter of fiscal 2023, sales in the Pork segment fell 7% on reduced pricing amid soft global demand. Segmental volumes dropped 0.2%, while the average price tumbled 6.7%.
TSN’s ongoing productivity initiatives based on procurement, logistics and digitalization are likely to solidify the company’s fundamentals. The Zacks Rank #3 (Hold) stock has gained 4.1% in the past six months against the industry’s decline of 11.2%.
Top-Ranked Staple Stocks
Pilgrim’s Pride (PPC - Free Report) , which produces, processes, markets and distributes fresh, frozen and value-added chicken and pork products, sports a Zacks Rank #1 (Strong Buy). Pilgrim’s Pride delivered an earnings surprise of 13.7% in the last reported quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for PPC’s current financial year earnings suggests a decline of 54.2% from the year-ago reported number.
MGP Ingredients, Inc. (MGPI - Free Report) produces and markets ingredients and distillery products to the packaged goods industry. The company currently has a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for MGP Ingredients’ current financial year sales and earnings suggests growth of almost 6% and 14.2%, respectively, from the year-ago reported figures. MGPI has a trailing four-quarter earnings surprise of 16.2% on average.
Celsius Holdings (CELH - Free Report) , which offers functional drinks and liquid supplements, carries a Zacks Rank #2. CELH delivered an earnings surprise of 81.6% in the third quarter of 2023.
The Zacks Consensus Estimate for Celsius Holdings’ current financial year sales and earnings suggests growth of 98.5% and 185.2%, respectively, from the year-ago reported numbers.
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Foodservice Unit Aids Tyson Foods (TSN), Soft Pork Sales Ail
Tyson Foods Inc. (TSN - Free Report) , which boasts a portfolio of impressive brands, is benefiting from its growing foodservice business. Management is undertaking several operational and supply chain efficiency programs to improve itself in the long run. However, TSN continues to battle softness in the Pork segment.
Let’s delve deeper.
Brand Strength & Foodservice Gains
Tyson Foods’ core business lines boast a portfolio of iconic retail brands, including Tyson, Jimmy Dean, Hillshire Farm and Ball Park. In the fourth quarter of fiscal 2023, such brands witnessed volume growth of 3.2% year over year, way ahead of other competitors. Management continues to see market share leadership across most retail categories in terms of pound and dollar share gains. The company intends to stay focused on merchandising and advertising to support its brands.
Speaking of the foodservice business, TSN continues to focus on six categories, including breakfast sausage, value-added chicken, dinner sausage, pepperoni pizza toppings, bacon and Philly Steak. These categories outpaced the broad-line industry in volume growth during the quarter. Management is impressed with its foodservice portfolio, which is likely to keep gaining momentum.
Image Source: Zacks Investment Research
What Else is Working in Tyson Foods’ Favor?
Tyson Foods is investing in capacity expansion and automation technology investments. In this regard, the company continues to accelerate digitalization via supply chain planning and execution processes to enhance customer service. Management is optimizing its plant network by adding fully-cooked capacity, converting plants for value-added production, executing plant flexibility and strengthening the portfolio mix. For the fiscal 2024, management projects capital expenditures to be nearly $1-$1.5 billion. These include spending related to capacity expansion, automation and product and brand innovation.
The company continues to evaluate its production footprint and network to fuel efficiencies. In this regard, management shut down six less efficient chicken plants. Tyson Foods also decided to shut down two smaller fresh meat case-ready value-added facilities.
TSN is focused on efforts to expand into the international markets as part of its strategic growth plan. Recently, management inaugurated a new fully-cooked food production facility in Danville, VA, worth $300 million. This move is in sync with Tyson Foods’ strategy to fuel sustained growth, enhance operational efficiency and invest in its poultry space.
Soft Pork Segment Hurts
Tyson Foods is facing weakness in the Pork segment stemming from supply-and-demand imbalances, which is affecting spreads. Although management is witnessing some improvement in spreads and reduced grain costs, it is still bearing the brunt of the imbalance between the supply and demand of pork. In the fourth quarter of fiscal 2023, sales in the Pork segment fell 7% on reduced pricing amid soft global demand. Segmental volumes dropped 0.2%, while the average price tumbled 6.7%.
TSN’s ongoing productivity initiatives based on procurement, logistics and digitalization are likely to solidify the company’s fundamentals. The Zacks Rank #3 (Hold) stock has gained 4.1% in the past six months against the industry’s decline of 11.2%.
Top-Ranked Staple Stocks
Pilgrim’s Pride (PPC - Free Report) , which produces, processes, markets and distributes fresh, frozen and value-added chicken and pork products, sports a Zacks Rank #1 (Strong Buy). Pilgrim’s Pride delivered an earnings surprise of 13.7% in the last reported quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for PPC’s current financial year earnings suggests a decline of 54.2% from the year-ago reported number.
MGP Ingredients, Inc. (MGPI - Free Report) produces and markets ingredients and distillery products to the packaged goods industry. The company currently has a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for MGP Ingredients’ current financial year sales and earnings suggests growth of almost 6% and 14.2%, respectively, from the year-ago reported figures. MGPI has a trailing four-quarter earnings surprise of 16.2% on average.
Celsius Holdings (CELH - Free Report) , which offers functional drinks and liquid supplements, carries a Zacks Rank #2. CELH delivered an earnings surprise of 81.6% in the third quarter of 2023.
The Zacks Consensus Estimate for Celsius Holdings’ current financial year sales and earnings suggests growth of 98.5% and 185.2%, respectively, from the year-ago reported numbers.