SPRINGDALE, ARK. — During its earnings call for first quarter of fiscal 2024, Donnie King, president and chief executive officer of Tyson Foods, and others in the company said that the meat company remains “cautiously optimistic” for the upcoming year.

Still, the company acknowledged challenges in the market, particularly in the beef business, and detailed how Tyson plans to move through the rest of 2024.

“Our team executed well in the quarter and delivered tangible results, including our third sequential quarter of adjusted operating income growth,” King said. “We saw the benefits of our diverse protein portfolio and realization of operational efficiencies from the strategic decisions we made in the past year.”

Revenues for the quarter were $13.32 billion, up a little less than 1% or $13.26 billion recorded in the prior year.

For the first quarter which ended Dec. 30, 2023, net income attributable to Tyson Foods was $107 million, or 30¢ per diluted share, down from $316 million, or 88¢ per diluted share, reported in the first quarter of 2023. GAAP operating income was $231 million, down 51% from the prior year at $467 million.

Tyson Foods reported an adjusted operating income of $411 million, down 9% from a year ago, which was $453 million. 

On a segment basis, Tyson’s Chicken business stood at $4.03 billion in sales, down from $4.26 billion. Volume in the segment declined 1.5%, while average price change declined 3.9% in the quarter.

Adjusted operating income for the chicken segment showed $192 million, up almost 150% from last year, which was $77 million. The operating margin of 4.4% was up from 1.6% in 2023.

“Although we still have work to do, I am pleased with our first quarter results and am confident we are on the right path to deliver long-term shareholder value,” King said. “Going forward, we will continue to prioritize our liquidity and financial health, our focus on operational excellence and our relentless pursuit to win with customers and consumers.”

Tyson Foods’ Beef business unit continued to reflect industrywide challenges in the market, while sales increased $5.02 billion compared to $4.72 billion in the first quarter of 2023, up 6.3%. However, adjusted operating loss was $117 million during the 2024 first quarter compared to $129 million operating income last year in the same period.

In its segment highlights during its investor presentation, Tyson noted that a significant decline in the cattle futures market led to an inventory valuation adjustment.

With the USDA projecting domestic production to decrease approximately 2% over fiscal 2024, Tyson anticipated that its operating income loss for the entire fiscal year would be between $400 million and breakeven. 

“We are seeing the benefits of our portfolio for chicken and pork, improvements are offsetting challenges in beef and where our Prepared Foods continue to deliver strong results,” King said during the conference call. “We continue to restore performances in our chicken business. “We’re managing beef through the volatility and spread tightening of the cycle. We’re making great progress in driving out the inefficiency all across the supply chain in pork.”

The company’s Pork business showed a slight dip in sales for the quarter at $1.52 billion compared to last year’s sales of $1.53 billion. Volume in the pork sector increased 7.7%, while prices dipped 8.5%. Adjusted operating income was $68 million for the quarter compared to a $19 million loss in the same quarter of 2023.

For fiscal 2024, Tyson anticipated adjusted operating income to be breakeven to $100 million for its pork segment. 

Tyson’s Prepared Foods business unit reported approximately $2.54 billion in sales for first quarter, up slightly compared to the prior year. Segment operating income was $243 million for the quarter. The operating margin of 9.6% was down from 10.2% in the prior year.

“Prepared Food is performing to plan,” King said during the call. “While we have seen softness in the retail channel, our brands have performed well. Core branch share remains near record levels, and we’re regaining share in our foodservice business. 

In its international sector Tyson posted sales for the quarter of $582 million, compared to $612 million in the same period last year with volume increased by 2.2% and prices decreased by 7.1%.

"We have considered our better-than-expected results in this quarter. We've considered our initiatives to improve performance while also still accounting for the ongoing macro uncertainty," King added.

Tyson stated that it expected capital expenditures of between $1 billion and $1.5 billion for fiscal 2024. This includes investments in profit improvement projects along with maintenance, repair, new equipment, automation technology and processes for product innovation.