Acquisitions drove sales
Tyson Foods (TSN) posted net sales $10.4 billion, which beat analysts’ expectation and increased 6.9% on a YoY (year-over-year) basis. The increase reflected incremental sales from the company’s recent acquisitions. Improved volumes and pricing in the beef segment also supported Tyson Foods’ sales.
Food companies have reported strong top-line growth in the past several quarters due to incremental sales from their recent acquisitions. Campbell Soup (CPB), Conagra Brands (CAG), General Mills (GIS), and J.M. Smucker (SJM) had stellar sales growth. However, weakness in the base business and negative currency rates continue to hurt.
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Sales by segments
Tyson Foods’ sales in the beef segment increased 5.5% due to higher volumes and pricing. The volumes increased 3.2% due to cattle availability. Higher demand for beef products drove the average sales price higher, which rose 2.3%.
Sales in the chicken segment rose 15.1% on a YoY basis, which reflected stellar volumes growth of +26.2%. Tyson Foods’ recent acquisitions drove the segment’s volumes. However, the average sale price fell -11.0%, which reflected the negative mix.
The pork segment’s net sales fell 7.4% on a YoY basis, which reflected lower pricing. The pricing fell 8.3% due to lower livestock costs. However, the volumes improved 1.0% due to higher demand.
The sales fell 5.6% in the prepared foods segment, which reflected lower volumes. The lower volumes were due to planned divestitures. However, the average sales price increased 3.9%, which reflected a favorable mix.
Tyson Foods’ management reaffirmed its fiscal sales outlook. The company expects to generate net sales of $43 billion. Improved volumes, especially in the chicken segment including benefits from Keystone acquisition and the favorable mix, are expected to drive the sales.