According to Tom Hayes, president and CEO, all four of Tyson’s business units realized operating margins above normalized ranges on an adjusted basis and the company benefited from anticipated synergies of the AdvancePierre acquisition and the continued benefit of synergies from the Hillshire Brands integration of that business provided momentum for the company. By fiscal 2020, net synergies of the AdvancePierre Foods deal are expected to top $200 million, while $17 million in Hillshire Brand synergies were reported over the third quarter of 2016. For the first nine months of its fiscal year, the company reported record adjusted operating income of $2.36 billion and record-high adjusted EPS of $3.88, which is 13 percent higher than the previous year.
“Our team delivered solid results in our third quarter with three of four segments on a GAAP basis and all four segments on an adjusted basis achieving operating margins in or above their normalized ranges. Our total net sales grew 4.8 percent compared to third quarter of 2016, and every segment delivered volume growth behind a strong start to grilling season and new product innovation,” Hayes said.
For the quarter, Tyson’s Beef and Pork sales increases for Q3 helped bolster its Chicken and Prepared Foods segments. Quarterly Beef sales of $4 billion compared to $3.78 billion during the same period last year and Pork business sales were $1.32 billion versus $1.27 billion in 2016. Beef sales increased due partly to availability of cattle and positive domestic demand and growing export volume. Average sales price for pork for the quarter and nine-month period were attributed to growing domestic and export demand, which fueled sales price increases as supplies struggled to meet live hog supplies.
“The Beef and Pork segments were very strong performers in the third quarter, and continued generating cash to fuel investments in our value-added Chicken and Prepared Foods businesses. Volume growth in our Core 9 retail and Focus 5 foodservice businesses again outpaced the industry as we built momentum with customers by satisfying consumer appetites for value-added protein and fresh foods,” according to Hayes.
Tyson’s Chicken business sales grew slightly, to 2.9 percent ($2.87 billion) in Q3 and topped $8.37 billion for the first nine months of the 2017 fiscal year compared to $8.12 billion during the same nine-month period ending July 2, 2016. Prepared Foods revenues of $1.94 billion represented 2.4 percent volume growth when comparing Q3 of 2017 with 2016 ($1.81 billion).
Looking to the future, Hayes said he is optimistic about ending on a high note and looks to 2018 positively.
“We're nearing the end of a record year of earnings per share and operating income, and we’re looking ahead to fiscal 2018 with great enthusiasm. We anticipate delivering another record year through differentiated capabilities, exceptionally strong brands and disciplined execution. We expect strong global demand for protein and superior focus on the fundamentals will contribute to a favorable operating environment in our Beef and Pork segments. In our Chicken segment, we will build our business through continued capacity expansion, No Antibiotics Ever and organic products, innovation and strong support of the Tyson brand. In the Prepared Foods segment, we continue to strengthen our business through improved execution in our foodservice operations, on-trend protein innovation and the integration of AdvancePierre.
“Tyson Foods is positioned to lead consumer fresh goods through our unique capabilities,” he said. “We bring together fresh food production and distribution, deep culinary expertise and consumer demand generation along with No. 1 brands and unmatched scale.”