Soaring meat prices helped Tyson Foods Inc (TSN.N) overcome pandemic-related labor shortages at its plants as the top U.S. meat packer reported a stronger-than-expected quarterly profit on Monday and forecast improved revenue in the year ahead.
The Springdale, Arkansas-based company reported a double-digit jump in sales and earnings in the fiscal fourth-quarter ended Oct. 2, including a record quarter in its beef segment despite a 20% surge in cattle prices.
Tyson shares were up around 4% in midmorning trading.
Rising meat prices and improving demand from restaurants have boosted U.S. meat companies including Tyson after the COVID-19 pandemic kept many diners at home last year. Meat packers have also seen record demand for American beef from China and amid diplomatic tensions between Beijing and supplier Australia.
Increased costs for labor, transportation and items such as feed grain and packaging have created headaches, however.
“Inflation has clearly had an impact on the business,” said CEO Donnie King. “As rates of inflation continue, so will our pricing actions.”
Top aides to U.S. President Joe Biden blamed Tyson and other large meat rivals that control much of the meat processing sector for rising food prices.
Tyson has rejected those assertions and instead blamed the pandemic and the U.S. labor shortage for limiting production.
The Jimmy Dean sausages maker said it was expecting sales of $49 billion to $51 billion for fiscal 2022, compared with market estimates of $47.99 billion, according to Refinitiv IBES.
Sales rose to $12.81 billion in the fourth quarter from $11.46 billion a year earlier. Analysts on average were expecting sales of $12.66 billion, according to Refinitiv IBES.
Net income attributable to Tyson increased to $1.36 billion, or $3.71 per share, from $654 million, or $1.79 per share, a year earlier.
Excluding one-off items, Tyson earned $2.30 per share, compared with estimates of $2.03.