Tyson Foods Reports First Quarter 2025 Results

SPRINGDALE, Ark., Feb. 03, 2025 (GLOBE NEWSWIRE) -- Tyson Foods, Inc. (NYSE: TSN), one of the world’s largest food companies and a recognized leader in protein with leading brands including Tyson, Jimmy Dean, Hillshire Farm, Ball Park, Wright, Aidells, ibp and State Fair, reported the following results: (in millions, except per share data)First Quarter 2025 2024Sales$13,623 $13,319 Operating Income$580 $231Adjusted1 Operating Income (non-GAAP)$659 $411 Net Income Per Share Attributable to Tyson$1.01 $0.30Adjusted1 Net Income Per Share Attributable to Tyson (non-GAAP)$1.14 $0.69 1 The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). As used in this table and throughout this earnings release, adjusted operating income and adjusted net income per share attributable to Tyson (Adjusted EPS) are non-GAAP financial measures. Refer to the end of this release for an explanation and reconciliation of these and other non-GAAP financial measures used in this release to comparable GAAP measures. First Quarter Highlights Sales of $13,623 million, up 2.3% from prior yearGAAP operating income of $580 million, up 151% from prior yearAdjusted operating income of $659 million, up 60% from prior yearGAAP EPS of $1.01, up 237% from prior yearAdjusted EPS of $1.14, up 65% from prior yearTotal Company GAAP operating margin of 4.3%Total Company adjusted operating margin (non-GAAP) of 4.8%Liquidity of $4.5 billion as of December 28, 2024Cash provided by operating activities of $1,031 million, down $269 million from prior yearFree cash flow (non-GAAP) of $760 million, down $186 million from prior year "Fiscal year 2025 is off to a strong start, as we delivered our third consecutive quarter of year-over-year growth in sales, operating income, and EPS," said Donnie King, President & CEO of Tyson Foods. "Our best quarterly performance in more than two years reflects improved execution across the business, including exceptional results in chicken. Consumers remain focused on adding protein to their diets, and our diversified multi-channel, multi-protein portfolio ensures we are well-positioned to meet this demand while reinforcing our leadership as a world-class food company." SEGMENT RESULTS (in millions) Sales(for the first quarter ended December 28, 2024, and December 30, 2023) First Quarter VolumeAvg. Price 2025 2024 ChangeChangeBeef$5,335 $5,023 5.6%0.6%Pork 1,617 1,517 (0.4) %7.0%Chicken 4,065 4,033 1.5%(0.7) %Prepared Foods 2,473 2,543 (3.2) %0.4%International/Other 584 582 4.3%(4.0) %Intersegment Sales (451) (379)n/an/aTotal$ 13,623 $ 13,319 1.6 % 0.7 % Operating Income (Loss)(for the first quarter ended December 28, 2024, and December 30, 2023) First Quarter Operating Margin 2025 2024 20252024Beef$(64)$(206)(1.2) %(4.1) %Pork 59 39 3.6%2.6%Chicken 351 177 8.6%4.4%Prepared Foods 209 243 8.5%9.6%International/Other 25 (22)n/an/aTotal$ 580 $ 231 4.3 % 1.7 % ADJUSTED SEGMENT RESULTS (in millions) Adjusted Operating Income (Loss) (Non-GAAP)1(for the first quarter ended December 28, 2024, and December 30, 2023) First Quarter Adjusted Operating Margin (Non-GAAP) 2025202420252024Beef$(32)$(117)(0.6) %(2.3) %Pork 59 68 3.6%4.5%Chicken 368 192 9.1%4.8%Prepared Foods 234 264 9.5%10.4%International/Other 30 4 n/an/aTotal$ 659 $ 411 4.8 % 3.1 % OUTLOOK For fiscal 2025, the United States Department of Agriculture (USDA) indicates domestic protein production (beef, pork, chicken and turkey) will increase approximately 1% compared to fiscal 2024 levels. The following is a summary of the updated outlook for each of our segments, as well as an outlook for revenue, capital expenditures, net interest expense, liquidity, free cash flow and tax rate for fiscal 2025. Certain of the outlook numbers include adjusted operating income (loss) (a non-GAAP metric) for each segment. The Company is not able to reconcile its full-year fiscal 2025 projected adjusted results to its fiscal 2025 projected GAAP results because certain information necessary to calculate such measures on a GAAP basis is unavailable or dependent on the timing of future events outside of our control. Therefore, because of the uncertainty and variability of the nature of and the amount of any potential applicable future adjustments, which could be significant, the Company is unable to provide a reconciliation for these forward-looking non-GAAP measures without unreasonable effort. Adjusted operating income (loss) should not be considered a substitute for operating income (loss) or any other measures of financial performance reported in accordance with GAAP. Investors should rely primarily on the Company’s GAAP results and use non-GAAP financial measures only supplementally in making investment decisions. BeefUSDA projects domestic production will decrease approximately 1% in fiscal 2025 as compared to fiscal 2024. We anticipate adjusted operating loss between $(0.4) billion and $(0.2) billion in fiscal 2025. PorkUSDA projects domestic production will increase approximately 2% in fiscal 2025 as compared to fiscal 2024. We anticipate adjusted operating income of $0.1 billion to $0.2 billion in fiscal 2025. ChickenUSDA projects chicken production will increase approximately 2% in fiscal 2025 as compared to fiscal 2024. We anticipate adjusted operating income of $1.0 billion to $1.3 billion for fiscal 2025. Prepared FoodsWe anticipate adjusted operating income of $0.9 billion to $1.1 billion in fiscal 2025. International/OtherWe anticipate improved results from our foreign operations in fiscal 2025 on an adjusted basis. Total CompanyWe anticipate total company adjusted operating income of $1.9 billion to $2.3 billion for fiscal 2025. RevenueWe expect sales to be flat to up 1% in fiscal 2025 as compared to fiscal 2024. Capital ExpendituresWe expect capital expenditures between $1.0 billion and $1.2 billion for fiscal 2025. Capital expenditures include investments in profit improvement projects as well as projects for maintenance and repair. Net Interest ExpenseWe expect net interest expense to approximate $375 million for fiscal 2025. LiquidityWe expect total liquidity, which was $4.5 billion as of December 28, 2024, to remain above our minimum liquidity target of $1.0 billion. Free Cash FlowWe expect free cash flow to be between $1.0 billion and $1.6 billion for fiscal 2025. Tax RateWe currently expect our adjusted effective tax rate to approximate 25% for fiscal 2025. TYSON FOODS, INC.CONSOLIDATED CONDENSED STATEMENTS OF INCOME(In millions, except per share data)(Unaudited) Three Months Ended December 28, 2024 December 30, 2023Sales$13,623 $13,319 Cost of Sales 12,528 12,496 Gross Profit 1,095 823 Selling, General and Administrative 515 592 Operating Income 580 231 Other (Income) Expense: Interest income (25) (10)Interest expense 120 105 Other, net 7 (25)Total Other (Income) Expense 102 70 Income before Income Taxes 478 161 Income Tax Expense 112 47 Net Income 366 114 Less: Net Income Attributable to Noncontrolling Interests 7 7 Net Income Attributable to Tyson$359 $107 Net Income Per Share Attributable to Tyson: Class A Basic$1.03 $0.31 Class B Basic$0.93 $0.28 Diluted$1.01 $0.30 Dividends Declared Per Share: Class A$0.510 $0.500 Class B$0.459 $0.450 Sales Growth 2.3% Margins: (Percent of Sales) Gross Profit 8.0% 6.2%Operating Income 4.3% 1.7%Net Income Attributable to Tyson 2.6% 0.8%Effective Tax Rate 23.5% 29.4% TYSON FOODS, INC.CONSOLIDATED CONDENSED BALANCE SHEETS(In millions)(Unaudited) December 28, 2024 September 28, 2024Assets Current Assets: Cash and cash equivalents$2,292 $1,717Accounts receivable, net 2,323 2,406Inventories 5,114 5,195Other current assets 353 433Total Current Assets 10,082 9,751Net Property, Plant and Equipment 9,353 9,442Goodwill 9,805 9,819Intangible Assets, net 5,799 5,875Other Assets 2,271 2,213Total Assets$37,310 $37,100 Liabilities and Shareholders’ Equity Current Liabilities: Current debt$95 $74Accounts payable 2,497 2,402Other current liabilities 2,188 2,311Total Current Liabilities 4,780 4,787Long-Term Debt 9,711 9,713Deferred Income Taxes 2,283 2,285Other Liabilities 1,909 1,801 Total Tyson Shareholders’ Equity 18,503 18,390Noncontrolling Interests 124 124Total Shareholders’ Equity 18,627 18,514 Total Liabilities and Shareholders’ Equity$37,310 $37,100 TYSON FOODS, INC.CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS(In millions)(Unaudited) Three Months Ended December 28, 2024 December 30, 2023Cash Flows From Operating Activities: Net income$366 $114 Depreciation and amortization 348 373 Deferred income taxes (2) (14)Other, net 78 129 Net changes in operating assets and liabilities 241 698 Cash Provided by Operating Activities 1,031 1,300 Cash Flows From Investing Activities: Additions to property, plant and equipment (271) (354)Purchases of marketable securities (15) (7)Proceeds from sale of marketable securities 16 6 Acquisition of equity investments (2) (26)Other, net 39 3 Cash Used for Investing Activities (233) (378) Cash Flows From Financing Activities: Proceeds from issuance of debt 22 771 Payments on debt (42) (32)Proceeds from issuance of commercial paper — 1,649 Repayments of commercial paper — (2,240)Purchases of Tyson Class A common stock (15) (13)Dividends (175) (171)Stock options exercised 15 7 Other, net — 3 Cash Used for Financing Activities (195) (26)Effect of Exchange Rate Changes on Cash (28) 15 Increase in Cash and Cash Equivalents and Restricted Cash 575 911 Cash and Cash Equivalents and Restricted Cash at Beginning of Year 1,717 573 Cash and Cash Equivalents and Restricted Cash at End of Period 2,292 1,484 Less: Restricted Cash at End of Period — — Cash and Cash Equivalents at End of Period$2,292 $1,484 Non-GAAP Financial Measures Adjusted Operating Income (Loss), Adjusted Income before Income Taxes, Adjusted Income Tax Expense, Adjusted Net Income Attributable to Tyson and Adjusted EPS, EBITDA, Adjusted EBITDA, net debt to EBITDA, net debt to Adjusted EBITDA and Free Cash Flow are presented as supplemental financial measures in the evaluation of our business that are not required by, or presented in accordance with GAAP. The non-GAAP financial measures are tools intended to assist our management and investors in comparing our performance on a consistent basis for purposes of business decision-making by removing the impact of certain items that management believes do not directly reflect our core operations on an ongoing basis. These non-GAAP measures should not be a substitute for their comparable GAAP financial measures. Investors should rely primarily on our GAAP results and use non-GAAP financial measures only supplementally in making investment decisions. We believe the presentation of these non-GAAP financial measures helps management and investors to assess our operating performance from period to period, including our ability to generate earnings sufficient to service our debt, enhances understanding of our financial performance and highlights operational trends. These measures are widely used by investors and rating agencies in the valuation, comparison, rating and investment recommendations of companies. Our calculation of non-GAAP measures may not be comparable to similarly titled measures reported by other companies and other companies may not define these non-GAAP financial measures in the same way, which may limit their usefulness of comparative measures. Definitions EBITDA is defined as net income before interest, income taxes, depreciation and amortization. Net debt to EBITDA (Adjusted EBITDA) represents the ratio of our debt, net of cash, cash equivalents and short-term investments, to EBITDA (and to Adjusted EBITDA). EBITDA, Adjusted EBITDA, net debt to EBITDA and net debt to Adjusted EBITDA are presented as supplemental financial measurements in the evaluation of our business. Adjusted EBITDA, Adjusted Operating Income (Loss), Adjusted Income before Income Taxes, Adjusted Income Tax Expense, Adjusted Net Income Attributable to Tyson and Adjusted EPS are defined as EBITDA, Operating Income (Loss), Income before Income Taxes, Income Tax Expense, Net Income Attributable to Tyson and diluted earnings per share, respectively, excluding the impacts of any items that management believes do not directly reflect our core operations on an ongoing basis. Free Cash Flow is defined as Cash Provided by Operating Activities minus payments for Property, Plant and Equipment. TYSON FOODS, INC.GAAP Results to Non-GAAP Results Reconciliations(In millions, except per share data)(Unaudited) Results for the first quarter ended December 28, 2024 SalesCost of SalesSelling, General and AdministrativeOperating IncomeOther (Income) ExpenseIncome before Income TaxesIncome Tax ExpenseNet Income Attributable to TysonEPS ImpactGAAP Results $580 $478 $112 $359 $1.01 Production facility fire insurance proceeds, net of costs incurred3—— — — (7) (7) (2) (5) (0.01)Brand discontinuation—— 6 6 — 6 2 4 0.01 Network optimization plan charges—71 2 73 — 73 17 56 0.16 The Netherlands facility4—— — — — — 9 (9) (0.03)Adjusted Non-GAAP Results $659 $550 $138 $405 $1.14 Results for the first quarter ended December 30, 2023 SalesCost of SalesSelling, General and AdministrativeOperating IncomeOther (Income) ExpenseIncome before Income TaxesIncome Tax ExpenseNet Income Attributable to TysonEPS ImpactGAAP Results $231 $161 $47 $107 $0.30 Production facility fire insurance proceeds, net of costs incurred3—(24)— (24)(3) (27) (6) (21) (0.06)The Netherlands facility4—26 — 26 — 26 — 26 0.07 Restructuring and related charges—3 27 30 — 30 8 22 0.06 Plant closures and disposals—75 — 75 — 75 19 56 0.16 Legal contingency accruals—73 — 73 — 73 18 55 0.16 Adjusted Non-GAAP Results $411 $338 $86 $245 $0.69 TYSON FOODS, INC.Adjusted Operating Income (Loss) Non-GAAP Reconciliations(In millions)(Unaudited) Adjusted Operating Income (Loss)(for the first quarter ended December 28, 2024) BeefPorkChickenPrepared FoodsInternational/OtherTotalReported operating income (loss)$(64)$59$351$209$25$580Add: Brand discontinuation — — 6 — — 6Add: Network optimization plan charges 32 — 11 25 5 73Adjusted operating income (loss)$(32)$59$368$234$30$659 Adjusted Operating Income (Loss)(for the first quarter ended December 30, 2023) BeefPorkChickenPrepared FoodsInternational/OtherTotalReported operating income (loss)$(206)$39$177 $243$(22)$231 Less: Production facility fire insurance proceeds, net of costs incurred3 — — (24) — — (24)Add: The Netherlands facility4 — — — — 26 26 Add: Restructuring and related charges 4 1 4 21 — 30 Add: Plant closures and disposals 40 — 35 — — 75 Add: Legal contingency accruals 45 28 — — — 73 Adjusted operating income (loss)$(117)$68$192 $264$4 $411 TYSON FOODS, INC.EBITDA and Adjusted EBITDA Non-GAAP Reconciliations(In millions)(Unaudited) Three Months Ended Fiscal Year Ended Twelve Months Ended December 28, 2024 December 30, 2023 September 28, 2024 December 28, 2024 Net income$366 $114 $822 $1,074 Less: Interest income (25) (10) (89) (104)Add: Interest expense 120 105 481 496 Add: Income tax expense 112 47 270 335 Add: Depreciation 281 312 1,159 1,128 Add: Amortization2 64 59 229 234 EBITDA$918 $627 $2,872 $3,163 Adjustments to EBITDA: Less: Production facility fire insurance proceeds, net of costs incurred3$(7) $(27) $(104) $(84)Add: Brand discontinuation 6 — 8 14 Add: Network optimization plan charges 73 — — 73 Add: Restructuring and related charges — 30 31 1 Add: Plant closures and disposals — 75 182 107 Add: Legal contingency accruals — 73 174 101 Add: The Netherlands facility4 — 26 86 60 Less: Depreciation and amortization included in EBITDA adjustments5 (29) (60) (129) (98)Total Adjusted EBITDA$961 $744 $3,120 $3,337 Total gross debt $9,787 $9,806 Less: Cash and cash equivalents (1,717) (2,292)Less: Short-term investments (10) (1)Total net debt $8,060 $7,513 Ratio Calculations: Gross debt/EBITDA 3.4x 3.1xNet debt/EBITDA 2.8x 2.4x Gross debt/Adjusted EBITDA 3.1x 2.9xNet debt/Adjusted EBITDA 2.6x 2.3x 2 Excludes the amortization of debt issuance and debt discount expense of $3 million and $2 million for the three months ended December 28, 2024 and December 30, 2023, respectively, and $12 million and $13 million for the fiscal year ended September 28, 2024 and the twelve months ended December 28, 2024, respectively, as it is included in interest expense. 3 Relates to a fire at a Chicken production facility in the fourth quarter of fiscal 2021. 4 Relates to a fire at our production facility in the Netherlands in the first quarter of fiscal 2024 and subsequent decision to sell the facility. 5 Removal of accelerated depreciation of $23 million related to network optimization plan charges for the three and twelve months ended December 28, 2024, $60 million related to plant closures and disposals for the three months ended December 30, 2023, $127 million related to plant closures and disposals for the twelve months ended September 28, 2024, and $67 million related to plant closures and disposals for the twelve months ended December 28, 2024 as they are already included in depreciation expense. Removal of accelerated amortization of $6 million, $2 million and $8 million related to brand discontinuation for the three months ended December 28, 2024, the twelve months ended September 28, 2024 and the twelve months ended December 28, 2024, respectively, as they are already included in amortization expense. TYSON FOODS, INC.Free Cash Flow Non-GAAP Reconciliation(In millions)(Unaudited) Three Months Ended December 28, 2024 December 30, 2023Cash Provided by Operating Activities$1,031 $1,300 Additions to property, plant and equipment (271) (354)Free cash flow$760 $946 About Tyson Foods, Inc.Tyson Foods, Inc. (NYSE: TSN) is a world-class food company and recognized leader in protein. Founded in 1935 by John W. Tyson, it has grown under four generations of family leadership. The Company is unified by this purpose: Tyson Foods. We Feed the World Like Family™ and has a broad portfolio of iconic products and brands including Tyson®, Jimmy Dean®, Hillshire Farm®, Ball Park®, Wright®, State Fair®, Aidells® and ibp®. Tyson Foods is dedicated to bringing high-quality food to every table in the world, safely, sustainably, and affordably, now and for future generations. Headquartered in Springdale, Arkansas, the company had approximately 138,000 team members on September 28, 2024. Visit www.tysonfoods.com. Conference Call Information and Other Selected DataA conference call to discuss the Company's financial results will be held at 9 a.m. Eastern Monday, February 3, 2025. A link for the webcast of the conference call is available on the Tyson Investor Relations website at https://ir.tyson.com. The webcast also can be accessed by the following direct link: https://events.q4inc.com/attendee/124939454. For those who cannot participate at the scheduled time, a replay of the live webcast and the accompanying slides will be available at https://ir.tyson.com. A telephone replay will also be available until March 3, 2025, toll free at 1-877-344-7529, international toll 1-412-317-0088 or Canada toll free 855-669-9658. The replay access code is 7066265. Financial information, such as this news release, as well as other supplemental data, can be accessed from the Company's web site at https://ir.tyson.com. Forward-Looking StatementsCertain information in this release constitutes forward-looking statements as contemplated by the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, current views and estimates of our outlook for fiscal 2025, other future economic circumstances, industry conditions in domestic and international markets, our performance and financial results (e.g., debt levels, return on invested capital, value-added product growth, capital expenditures, tax rates, access to foreign markets and dividend policy). These forward-looking statements are subject to a number of factors and uncertainties that could cause our actual results and experiences to differ materially from anticipated results and expectations expressed in such forward-looking statements. We wish to caution readers not to place undue reliance on any forward-looking statements, which are expressly qualified in their entirety by this cautionary statement and speak only as of the date made. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Among the factors that may cause actual results and experiences to differ from anticipated results and expectations expressed in such forward-looking statements are the following: (i) global pandemics have had, and may in the future have, an adverse impact on our business and operations; (ii) the effectiveness of financial excellence programs; (iii) access to foreign markets together with foreign economic conditions, including currency fluctuations, import/export restrictions and foreign politics; (iv) cyber attacks, other cyber incidents, security breaches or other disruptions of our information technology systems; (v) risks associated with our failure to consummate favorable acquisition transactions or integrate certain acquisitions’ operations; (vi) the Tyson Limited Partnership’s ability to exercise significant control over the Company; (vii) fluctuations in the cost and availability of inputs and raw materials, such as live cattle, live swine, feed grains (including corn and soybean meal) and energy; (viii) market conditions for finished products, including competition from other global and domestic food processors, supply and pricing of competing products and alternative proteins and demand for alternative proteins; (ix) outbreak of a livestock disease (such as African swine fever (ASF), avian influenza (AI) or bovine spongiform encephalopathy (BSE)), which could have an adverse effect on livestock we own, the availability of livestock we purchase, consumer perception of certain protein products or our ability to conduct our operations; (x) changes in consumer preference and diets and our ability to identify and react to consumer trends; (xi) effectiveness of advertising and marketing programs; (xii) significant marketing plan changes by large customers or loss of one or more large customers; (xiii) our ability to leverage brand value propositions; (xiv) changes in availability and relative costs of labor and contract farmers and our ability to maintain good relationships with team members, labor unions, contract farmers and independent producers providing us livestock; (xv) issues related to food safety, including costs resulting from product recalls, regulatory compliance and any related claims or litigation; (xvi) compliance with and changes to regulations and laws (both domestic and foreign), including changes in accounting standards, tax laws, environmental laws, agricultural laws and occupational, health and safety laws; (xvii) the effect of climate change and any legal or regulatory response thereto; (xviii) adverse results from litigation; (xix) risks associated with leverage, including cost increases due to rising interest rates or changes in debt ratings or outlook; (xx) impairment in the carrying value of our goodwill or indefinite life intangible assets; (xxi) our participation in a multiemployer pension plan; (xxii) volatility in capital markets or interest rates; (xxiii) risks associated with our commodity purchasing activities; (xxiv) the effect of, or changes in, general economic conditions; (xxv) impacts on our operations caused by factors and forces beyond our control, such as natural disasters, fire, bioterrorism, pandemics, armed conflicts or extreme weather; (xxvi) failure to maximize or assert our intellectual property rights; (xxvii) effects related to changes in tax rates, valuation of deferred tax assets and liabilities, or tax laws and their interpretation; and (xxviii) the other risks and uncertainties detailed from time to time in our filings with the Securities and Exchange Commission, including those included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our most recent Annual Report on Form 10-K and Quarterly reports on Form 10-Q. Media Contact: Laura Burns, 479-713-9890Investor Contact: Sean Cornett, 479-466-0401Source: Tyson Foods, Inc.Category: IR, Newsroom

Tyson Foods Reports First Quarter 2025 Results

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