Costs hinder Tyson Foods’ half-year growth

By Aidan Fortune

- Last updated on GMT

The rising cost of labour and transport has impacted the first six months of the year for Tyson
The rising cost of labour and transport has impacted the first six months of the year for Tyson

Related tags Poultry

Rising costs have hampered Tyson Foods’ growth in the first half of the year, mostly cancelling out sales increases.

The company reported an operating income of $1,425 million (m), down 8% from last year, however its sales were up year-on-year ($20,002m vs. $18,265m in 2017). It attributed increased labour and freight costs as the reason for the faltering income.

Protein breakdown

The business’ beef sales grew in volume terms during the six months, which was attributed to improved availability of cattle supply, stronger demand for beef products and increased exports. Its average sales price also increased for the six months.

On the pork side, sales volumes decreased for the six months of 2018 as a result of balancing supply with customer demand during a period of margin compression. Average sales prices increased for the period, due to price increases in the first quarter of fiscal 2018 associated with higher livestock costs.

Sales volumes in chicken were up for the six months of 2018, due to strong demand along with the incremental volume from the acquisition of sandwich-maker AdvancePierre​. Average sales price increased for the six months due to sales mix changes. It also saw success for its prepared foods business, with sales volumes increasing thanks to the AdvancePierre deal.

Tom Hayes, president and chief executive officer, said: “We are continuing to grow our business as we create a modern food company focused on protein. Sales, volume, adjusted operating income and adjusted EPS all increased in the fiscal second quarter vs. the same period last year. Up against challenging conditions, we delivered solid results in all four of our segments.

“We’ve built a strong foundation of sustainable growth that positions us well for the second half of the fiscal year and beyond. We’re outpacing the food and beverage industry today – and looking ahead, we'll keep challenging the status quo and drive growth across our iconic brands.”


Looking ahead, the company expects fiscal 2018 sales to grow approximately 6% to between $40-$41 billion which is attributed to incremental AdvancePierre sales of $1.1bn, 

Related topics Meat

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