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What Analysts Expect from Tyson Foods on the Sales Front

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Wall Street’s consensus for fiscal 3Q17

Analysts expect Tyson Foods (TSN) to post sales of $9.5 billion in fiscal 3Q17, reflecting a YoY (year-over-year) increase of 1%. The company’s top line is expected to benefit from improved volumes due to higher consumption in the US (SPY) and growing demand for pork in the international markets. However, lower average selling prices are expected to offset the positives.

In comparison, Hormel Foods’ (HRL) sales are also projected to decline in its upcoming third quarter. Meanwhile, sales for Sanderson Farms (SAFM) and Pilgrim’s Pride (PPC) are expected to gain from increased demand for chicken.

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Digging deeper

Lower volumes across all of its segments negatively impacted Tyson Foods’ sales in fiscal 2Q17. The decline in average selling prices further pressured its top line. Fires at two of its chicken plants further disrupted its volumes growth.

However, the company remains optimistic and expects the second half of fiscal 2017 to benefit from increased demand. The consumer shift toward protein-rich diets is fueling demand for meat producers. Tyson Foods is restructuring its portfolio and is focusing on protein-packed brands to benefit from the shift in consumer tastes and preferences.

Tyson Foods is looking to spin off its non-protein offerings to focus on its core business. Meanwhile, the company acquired AdvancePierre Foods Holdings to supplement its portfolio of protein-rich offerings. These measures are expected to help the company’s sales in coming quarters. However, lower average selling prices could remain a drag on its business.

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