(NewsNation) — Tyson Foods, which is the biggest meat company in the U.S. and the country’s largest processor by sales, released its quarterly earnings report Monday, and the numbers sent the stock plummeting 10% — it’s biggest daily decline in two years
The company raised chicken prices by more than 20% last fiscal quarter and made the same amount of money as a year earlier. But inflationary pressures, in the form of demand for higher wages, increased fuel expenses and the price of feed ingredients, cost the company $145 million more this quarter than they did a year ago.
“We delivered solid results during the third quarter, focusing on operational excellence and aggressive cost management,” Donnie King, the president and CEO of Tyson Foods, said in a statement to financial outlet Benzinga. “The turnaround of our chicken business continues, and we continue to be the market share leader in many of our retail business lines, which include our Tyson, Jimmy Dean, Hillshire Farm and Ball Park iconic brands.”
King said Tyson has “maintained double-digit sales and earnings growth year to date as well as progressing toward our goal of delivering more than $1 billion in recurring productivity savings by the end of fiscal 2024.
“I’m optimistic about our ability to win with our team members, win with our customers and consumers and win with excellence in execution,” he added.
Global poultry prices hit an all-time high in June, which helped keep Tyson’s sales totals up despite volume declining about 2%. And Tyson’s chicken unit reported $4.37 billion in sales in the fiscal third quarter — up 25% from a year earlier.
But consumers are shying away from premium cuts of beef, bringing down the average sale price in that division, and hurting the company’s bottom line.
In total, Tyson reported quarterly sales of $13.5 billion, surpassing expectations but resulting in a net income of $750 million in Q3. A year prior? It was a nearly identical $749 million.
Tyson controls about 20% of the U.S. meat market, but a newly approved merger is set to introduce a new major player to that scene.
Cargill and Continental Grain have acquired Sanderson Farms for $4.5 billion. Sanderson is the third-largest processor, and this new company will lay claim to about 15% of the U.S. market.
Industry experts fear consolidation will drive prices up even further, in the name of profit growth — good news for the chicken companies’ bottom lines, but potential bad news for consumers.