Tyson Foods has raised its fiscal 2022 revenue outlook as customer demand for its chicken, beef and pork continues to outpace supply.
|TSN||TYSON FOODS INC.||89.06||+0.31||+0.35%|
The company is now expecting total fiscal 2022 sales in the range of $52 billion to $54 billion, up from previous guidance of $49 billion to $51 billion.
During the second quarter of 2022, Tyson reported adjusted earnings per share of $2.29 and generated $13.12 billion in total sales, including $5.03 billion in sales of beef, $4.09 billion in sales of chicken and $1.57 billion in sales of pork. Sales volume for beef and chicken was flat, while pork sales volume fell 4.8% for the three-month period ending April 2.
Tyson CEO Donny King emphasized on the company's earnings call on Monday that every part of the business is being impacted by inflationary pressures.
"We experienced higher costs across our supply chain for all inputs from feed ingredients, live animals and other raw materials to cooking oils and basic supplies," King explained. "We are also managing higher costs of labor and transportation due to robust demand, higher fuel costs and limited availability as part of our effort to combat inflation and increase profitability."
To combat inflation, Tyson has passed on some of the burden to consumers in the form of price increases. Tyson's average beef prices surged 23.8% year-over-year during the quarter, while average chicken and pork prices increased 14.4% year-over-year and 10.8% year-over-year, respectively.
Looking ahead, the company expects inflationary pressures will continue through the back half of the year.
"We'll continue navigating the increase of inputs with pricing to offset inflation as necessary," Tyson's president of prepared food, Noelle O'Marra, told analysts.
In addition to price hikes, Tyson is targeting $1 billion in productivity savings by the end of fiscal 2024. The company is on track to achieve more than $400 million in productivity savings planned in fiscal 2022.